Online advertising is a backbone of the digital economy as many providers of online services and apps finance their services, which are often offered ‘for free’ to final consumers, with revenues derived from advertisements. To this end, they rely on providers of ad tech services that intermediate the sale of their advertising inventory. The competitive process between providers of these ad tech services is fraught with, inter alia, anti-competitive self-preferencing and tying practices by Google. In recent years, the competitive problems in ad tech have caught the attention of competition authorities worldwide with the result that there are several ongoing investigations in major jurisdictions like the EU, US, and UK.
Against the backdrop that the abuse of dominance provision in Art. 102 TFEU and its enforcement had a very limited effect on resolving the existing competitive problems in ad tech so far, the study builds on the hypothesis that there is a need for a different enforcement approach and potentially a novel legal framework to restore competition in ad tech. The study explores the effects of the DMA and the 10th and 11th amendment to the German Competition Act on ad tech and asks, what kind of remedies by competition authorities and/or legislative intervention online display advertising intermediation markets need in order for competition to function.
The study reaches several key findings. To begin with, the study endorses the need for a structural intervention in ad tech. The imposition of behavioural remedies has proven to be ineffective and does not resolve the structural problems stemming from Google’s conflicts of interest. The study argues that current proposals of the European Commission and the US Department of Justice in this regard focus too much on the supply side and neglect and underestimate Google’s control over the demand side of online display advertising.
Also, the study finds that Google’s dual role as a publisher of display advertising and an intermediary for the sale of display advertising for other publishers is normatively anchored as a potential danger to competition in Art. 2 (6) of the Vertical Block Exemption Regulation. The study argues that the normative idea of this provision can and should be transferred to Art. 102 TFEU and Google’s role in ad tech. Therefore, it encourages the European Commission to open an investigation into the potential harms to competition in the market for online display advertising.
Moreover, the study finds the need for a DMA compliance investigation scrutinizing Google’s implementation of the DMA. Art. 5 (8) DMA prohibits gatekeepers from requiring their business users to subscribe to any further core platform service as a condition for being able to use any of that gatekeeper’s core platform service. Despite this provision, Google continues to require business users to use its own online advertising services in order to advertise on YouTube and Google Search.
