RÉPUBLIQUE FRANÇAISE Only the French version is authentic and it prevails in the event of its differing from the translated version. Decision 19-D-26 of 19 December 2019 regarding practices employed in the online search advertising sector* The Autorité de la concurrence (section IV), Having regards to the letter registered on 6 March 2015 under number 15/0019 F, by which Gibmedia referred to the Autorité de la concurrence practices employed by Google Inc. (now Google LLC) and Google Ireland Ltd; Having regards to Article 102 of the Treaty on the Functioning of the European Union (TFEU); Having regards to Book IV of the French Code of Commercial Law (Code de commerce) and particularly Article L. 420-2 thereof; Having regards to Decision 15-D-13 of 9 September 2015 regarding a request by Gibmedia for interim measures; Having regards to the Decisions on business secrecy 16•DSA•189 of 19 July 2016, 19•DSADEC•193 of 29 May 2019, 16•DSA•193 of 20 July 2016, 18•DSA•074 of 9 March 2018, 16•DSA•195 of 21 July 2016, 16•DSA•91 of 13 April 2016, 16•DSA•124 of 3 June 2016, 16•DSA•125 of 3 June 2016, 16•DSA•126 of 3 June 2016, 18•DEC•078 of 12 March 2018, 17•DSA•214 of 18 May 2017, 16•DSA•05 of 7 January 2016, 17•DSA•058 of 8 February 2017, 16•DSA•198 of 25 July 2016, 16•DSA•199 of 25 July 2016, 16•DSA•200 of 25 July 2016, 15•DSA•385 of 20 November 2015, 16•DSA•127 of 6 June 2016, 16•DSA•128 of 6 June 2016, 16•DSA•129 of 6 June 2016, 16•DSA•130 of 6 June 2016, 16•DSA•131 of 6 June 2016, 16•DSA•99 of 18 April 2016, 16•DSA•203 of 27 July 2016, 16•DSA•132 of 8 June 2016, 16•DSA•133 of 8 June 2016, 16•DSA•134 of 8 June 2016, 16•DSA•206 of 28 July 2016, 17•DSA•218 of 23 May 2017, 16•DSA•60 of 4 March 2016, 16•DSADEC•01 of 23 March 2016, 18•DSA•086 of 21 March 2018, 16•DSA•136 of 13 June 2016, 16•DSA•141 of 13 June 2016, 16•DSA•207 of 2 August 2016, 17•DSA•227 of 30 May 2017, 17•DSA•228 of 30 May 2017, 17•DSA•229 of 30 May 2017, 17•DSA•230 of 31 May 2017, 17•DSA•231 of 31 May 2017, 17•DSA•232 of 31 May 2017, 17•DSA•233 of 31 May 2017, 17•DSA•234 of 31 May 2017, 17•DSA•235 of 31 May 2017, 17•DSA•236 of 31 May 2017, 17•DSA•237 of 31 May 2017, 1 17•DSA•238 of 31 May 2017, 17•DSA•297 of 20 July 2017, 18•DECR•338 of 17 October 2018, *Non-confidential version 2 18-DEC-339 of 11 October 2018, 18-DECR-340 of 11 October 2018, 18-DECR-341 of 11 October 2018, 18-DECR-342 of 11 October 2018, 18-DECR-343 of 11 October 2018, 18-DECR-344 of 11 October 2018, 18-DEC-345 of 15 October 2018, 18-DECR-346 of 11 October 2018, 18-DEC-347 of 11 October 2018, 18-DECR-348 of 11 October 2018, 17•DSA-241 of 1 June 2017, 17-DSA-242 of 1 June 2017, 17-DSA-085 of 22 February 2017, 19-DSA-533 of 25 September 2019, 17-DSA-002 of 4 January 2017, 18•DEC-353 of 15 October 2018, 18-DEC-360 of 16 October 2018, 19-DSA-098 of 14 March 2019, 18•DECR-357 of 17 October 2018, 18-DSA-361 of 17 October 2018, 16•DSA-29 of 2 February 2016, 16-DSA-32 of 4 February 2016, 16-DSA-40 of 11 February 2016, 16•DSA•177 of 8 July 2016, 16-DSA-178 of 8 July 2016, 16-DSA-237 of 22 August 2016, 16•DSA-240 of 22 August 2016, 16-DSA-244 of 22 August 2016, 16•DSA-246 of 22 August 2016, 16-DSA-247 of 22 August 2016, 16-DSA-337 of 10 October 2016, 16-DSA-339 of 12 October 2016, 16-DSA-342 of 17 October 2016, 16•DSA-363 of 26 October 2016, 17•DSA-110 of 13 March 2017, 17-DSA-121 of 17 March 2017, 17-DSA-193 of 10 May 2017, 17-DSA-203 of 11 May 2017, 17-DSA-253 of 13 June 2017, 17-DSA-254 of 13 June 2017; Having regards to the observations submitted by Gibmedia, Alphabet Inc., Google LLC, Google Ireland Ltd, Google France and the representative of the Minister of the Economy; Having regards to the note of 30 October 2019 submitted during the deliberations by the Google companies; Having regards to the other evidence in the case; The case officers (rapporteurs), the Deputy General Rapporteur, the representative of the Minister of the Economy and the representatives of Gibmedia, Alphabet Inc., Google LLC, Google Ireland Ltd and Google France, having been heard at the hearing with the Autorité de la concurrence of 18 October 2019, Adopts the following decision: 3 Summary1 Under this Decision, the Autorité de la concurrence fines Google for abusing its dominant position in the online search advertising market, in violation of Article L. 420-2 of the French Code of Commercial Law (Code de Commerce) and Article 102 of the Treaty on the Functioning of the European Union. This decision follows a complaint by Gibmedia. The investigation carried out led to a Statement of Objections concerning the non-transparent, non-objective and discriminatory application of the rules of Google’s AdWords online search advertising service, renamed Google Ads in July 2018. In the French online search advertising market, Google has a dominant position which, in many respects, presents “extraordinary” characteristics. Its search engine currently accounts for more than 90% of searches conducted in France and its share of the online search advertising market is probably greater than 90%. But above all, this dominance benefits from strong dynamics that make the Google Ads services particularly attractive to advertisers. The vast number of searches conducted using Google’s search engine increases the search engine’s attractiveness to internet users, but also makes the Google Ads services more attractive to advertisers, who need to ensure their ads reach a very large audience. This power of attraction and accumulation, related to the two-sided nature of the Google Ads platform and its ultra-dominant position, guarantees Google’s constant growth. Google defines and publishes the rules associated with the Google Ads advertising service. The rules specify the conditions under which advertisers can run ads on the Google network (the “Rules”). These Rules govern the interactions between internet users and advertisers on the two-sided Google Ads platform. Google’s dominance in the online search advertising market means that it has a special responsibility under competition rules, particularly as regards applying the Rules it has defined and which, de facto, influence advertisers’ business models and regulate the interactions between internet users and advertisers. The advertisers’ position regarding Google’s offer is particularly constrained. They have no other choice than to accept the Rules or to stop using Google Ads’ services, even though these represent almost the only offer on the online search advertising market in France. Some of these Rules are designed to prevent internet users from being exposed to malicious websites that could harm their interests. There is nothing in principle to be criticised about the setting of these Rules. However, the Rules in question must be defined and applied objectively, transparently and without discrimination, in view of both their impact on the activity of the advertisers and the websites and products they promote, and their more general effects on internet users and the whole ecosystem. Any attempt to ascertain the exact scope of each Rule is thwarted by their lack of clarity and the absence, in some cases, of any clear distinction between them, even though there are many of them. The opacity and lack of objectivity of the Rules make it difficult for operators to anticipate the conformity of their advertisements, products and services with the Google Ads Rules. 1This summary is strictly for information purposes. Only the grounds of the decision listed below are binding. 4 They also mean that Google has all the discretion to ensure they are being respected and to modify them. An examination of the conditions of application of the Rules shows that Google has used this discretionary power in a random and unfair manner by treating similar operators differently and by making sudden shifts in position with regard to the same advertisers, increasing the opacity of the Rules. Google has also acted inconsistently towards certain advertisers, aggravating the lack of clarity of the Rules. Google’s sales teams have thus been able to work proactively with some advertisers, offering them “personalised assistance” to develop their sites through the Google Ads services. However, some of the sites approached are sites that were previously suspended for breaching the Rules, particularly those designed to protect internet users. Google’s Rules and their application overstep what would be considered proportionate to the legitimate aim of protecting Google’s consumers. In addition to direct effects on the online search advertising market, this could also potentially harm competition in the downstream markets in which the advertisers operate. The formulation of the Rules and their unfair and discriminatory application are likely to discourage the entry of innovative sites while failing to bar sites that are potentially harmful for consumers.