The German Federal Cartel Office has investigated the trade in advertising space on the Internet and found that Google has a dominant position – even outside its own search engine. An antitrust investigation is now to follow.
Google has considerable influence
According to President Andreas Mundt, the German Federal Cartel Office first determined that behind the playout of advertising outside of search engines is a “highly complex system of automated trading in online advertising space, which is quite opaque to many.” The authority sees its goal as “shedding more light on this black box [in order] to be able to answer questions of market power and the associated regulation under competition law.” It has already become clear to the supervisory authority that Google occupies a central position in advertising outside search engines: “Google also has a strong market position in this technical sub-sector of online advertising at almost all stages of the value chain. Numerous competitive issues arise, not least for this reason.”
The process behind visible online advertising includes not only the automated trading of advertising space but also the automated playout and performance measurement of the ads and is significantly influenced by individual market participants, the Bundeskartellamt continues. Google once again has a special role to play here among the particularly prominent market participants: “Google is represented at almost all stages of the value chain and in virtually all relevant services, and in most cases holds a very strong market position.”
New competition law options
Since 2021, the German Federal Cartel Office has had new options under competition law that enable it to intervene in certain behaviors of large digital groups much sooner than before. Mundt referred to these new instruments of market regulation in connection with the publication of a discussion report on the situation of online advertising. Google had already become the focus of the supervisory authority at the time of the introduction of the new supervisory instruments. Market participants as well as interested parties now have until October 28 to comment on the discussion report.
Google rejects criticism
Google has already rejected criticism of its own market positioning. A spokesman for the company said that Google’s involvement in the market in question was, on the one hand, “helping companies of all sizes [to] effectively reach their customers” and, on the other, that it was facing major competition. He added that the Bundeskartellamt’s report only covers a small subset of the market, not the entire ad market, where ad space can be purchased on hundreds of platforms and from numerous established players. The spokesperson further announced a close examination of the report and cooperation with the Federal Cartel Office.