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German antitrust office starts asking questions about online ad platform giants

German antitrust office starts asking questions about online ad platform giants
From TechCrunch - February 1, 2018

Germanysnational competition regulator has announced its looking into market conditions in the online advertising sector, responding to concerns that a lack of transparency could be skewing market conditions. It could open up a full sector enquirydepending on results of its initial probe.

The antitrust office says it will start by looking into the effects of technical developments on the market structure and market opportunities of the various players involved. It also specifies it will investigate whether large ad platforms like Google and Facebook are operating as walled gardens, and consider their potential impact on competition.

Together the two tech giants accounted for more than 60 per cent of US online ad spending in 2017, according to eMarketer.

Due to the great economic importance of this sector for advertisers and content providers active on the Internet and in view of discussions about the difficult competitive environment in this market, we have decided to examine this sector,said Andreas Mundt, president of the Bundeskartellamt, in a statement.

The issue of access to and the processing of data is also highly relevant from a competition point of view, he added, saying large single companies with considerable market relevance like Google or Facebook have emerged which, in the view of some market players, have been able to set up closed systems, so-called walled gardens'.

The global turnover of online advertising is estimated at more than $200BN last year, according to eMarketer data, cited by the Federal Cartel Office. Of that it says 5.5BN is generated in Germanyaccounting for around 30 per cent of the overall ad spend in the country.

As a first step, the Bundeskartellamt says it intends to hold discussions with industry players to gather viewpoints and aim to narrow down the scope of its probe. Questionnaires will be sent out to market participants this spring.

After that it could move on to conduct a full sector inquiry saying this could be triggered if specific circumstances suggest the competition in a sector may be restricted or distorted.

Weve reached out to Google and Facebook for comment. At the time of writing neither company has responded.Update:A Facebook spokesperson has now emailed this statement: We will co-operate fully with the Bundeskartellamt on this sector inquiry and welcome the opportunity to share our insights on the dynamic and competitive nature of the advertising industry.

The Bundeskartellamt has also published a paper on online advertising, which sets out some of the issues of concern and contention. Among the concerns it lists is howGoogles launch of accelerated mobile pages (AMP)ostensibly for supporting faster load speeds of mobile web pagescould lead to advertisers being tied to Google on account of AMP-enabled delivery of sites being via Googles servers.

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