FILE PHOTO: The logo of Google is seen on a building at La Defense business and financial district in Courbevoie near Paris, France, in this September 1 2020 file photo. Picture: REUTERS/CHARLES PLATIAU
FILE PHOTO: The logo of Google is seen on a building at La Defense business and financial district in Courbevoie near Paris, France, in this September 1 2020 file photo. Picture: REUTERS/CHARLES PLATIAU

Paris — Google agreed to pay €220m and change the way its business works across the world after settling an investigation by French authorities that struck at the heart of its power over online advertising.

France’s antitrust agency said Monday the US tech giant used its dominance of ad sales and purchasing on its platforms to distort the market to its own advantage, hurting publishers such as News Corp.

“Google took advantage of its vertical integration to skew the process,” Isabelle de Silva, who heads France’s Autorité de la Concurrence, said. She described Google’s behaviour as “particularly serious”.

The decision is a rare look inside the black-box of online advertising where Google automatically calculates and offers space and prices to advertisers and publishers as a user clicks on a web page. Google also entered a pledge to remedy the situation by making sure its Google Ad Manager services work more smoothly for third parties.

De Silva said Google intends to apply some of these commitments on a worldwide level.

With separate cases into Google, Apple and Facebook, French antitrust regulators are starting to rein in anticompetitive behaviour in online advertising. While Google’s case ended with a fine, Facebook last week tried to avoid that by making commitments to placate regulators.

Google said in a blog post it’s “committed to working proactively with regulators everywhere to make improvements to our products.” The company said it will test and develop behavioural changes agreed as part of the settlement over the coming months.

The Google case stems from a complaint lodged in 2019 by News Corp, French newspaper Le Figaro and media firm Groupe Rossel la Voix SA. Le Figaro decided to withdraw from the case in November 2020.

“For years there was a fear of taking on these platforms because they were too powerful,” de Silva said. She fully expects requests for damages to be lodged following the regulator’s decision.

The case sprang from a study the French Competition Authority published in 2018 after conducting a sector inquiry into online advertising, which put the spotlight on the power of Google and Facebook.

Google has already attracted French antitrust scrutiny for online advertising in the past, with a €150m fine in 2019. The search engine also risks a penalty on suspicions that it failed to comply with an order relating to its news service.

The French settlement is the latest in a series of efforts to crack down on Silicon Valley’s market dominance across the continent. Last week, Google’s news service was targeted by a German probe. The EU and the UK also opened investigations into Facebook about how it uses some information from advertisers.

Ahead of the past weekend’s landmark G7 tax agreement, tech firms have also faced intense scrutiny of their tax affairs, amid criticism that they don’t pay their fair share, despite racking up huge sales in the region.

More stories like this are available on bloomberg.com

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