Google AdWords’ Discriminatory Behavior Needs Tweaking, French Regulator Says

Google AdWords was found to abuse its dominant position on the French market and ordered to clarify both its rules and processes for advertisers, after a complaint by location data company Navx was filed with the French Competition Body, Autorité de la Concurrence. Albeit an interim decision, the ruling is the first such in Europe against the search giant. So if you thought this was a day without Google in the news, think again.

Discriminatory Practices
In a statement, the Autorité de la Concurrence said Google’s treatment of advertisers (i.e. its clients) on AdWords was unfair, and the Mountain View-based company failed to provide information in “an objective, transparent and non discriminatory fashion,” taking advantage of its dominant position on the French market. According to the regulator, Google accounts for 90% of searches conducted in France.

Regulatory Disclosure
Speaking on the complaint, a spokesperson for the Autorité de la concurrence said that the final decision would be rendered in “10 to 12 months,” but as stipulated by the interim ruling, in the meantime, Google Inc and Google Ireland (its European headquarters) has four months to clarify two key elements – First, the conditions for “devices aimed at evading traffic speed cameras” to qualify for its AdWords service; and second, the processes for excluding advertisers from AdWords. Such disclosure “must be made available to advertisers in an objective, transparent and non discriminatory fashion. In addition, the date from which the modified conditions will be applicable to advertisers must be specified,” the French regulator said. Finally, Google is also required to reinstate within five days the account of plaintiff Navx.

All Eggs In The Same Basket
Navx is a startup that provides geolocalization content for GPS navigation, specifically fixed and mobile speed cameras localization and gas prices implemented by service stations. Its February complaint followed Google AdWords’ decision to suspend its AdWords account without giving the company forward notice and thereby cutting it from its main source of revenue, i.e. online purchases driven by PPC ads. According to the full text of the ruling, around 85% (84.91% to be precise) of the start-up’s communications budget is allocated to AdWords. The again, question: why doesn’t Navx capitalize on its Facebook presence to balance its sources of revenues? When Facebook fully enters the search market, the game will be more fun and ‘diversified.’ Right, Google?

Looking to the future, the spokesperson for the regulator told us that it was invited by the French government to submit comments on the online advertising market in the Fall. And speaking of Google tweaking practices to abide the law, we’re also awaiting to hear whether Google was granted renewal of its ICP licence in China.