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EU urged to probe how tech giants make money on ads – RTÉ News


European Union competition enforcers are being urged to scrutinise how ads fuel profits at tech giants such as Google and Facebook, Bloomberg has reported. 

Brave Software, which makes an ad-blocking browser, wrote to EU Competition Commissioner Margrethe Vestager, warning how a handful of companies control how ads are placed with web publishers, a situation that might allow them to dictate prices and terms.

Despite online advertising’s size and importance “it is an opaque market” that may be “distorted by severe concentration issues, and perhaps by anti-competitive behavior,” Johnny Ryan, Brave’s chief policy officer, said in the letter seen by Bloomberg. 

Mr Ryan has called for the EU to start a wide “sector inquiry” to examine the entire online ad industry.

Online ads are already a focus for several smaller competition agencies in Europe, often prompted by complaints from media companies as advertising spend shifts to the web.  

France’s competition authority has flagged the scale of Google’s ad offer and data as a potential concern.  

Germany started an inquiry in February and Dutch regulators have been looking at how media companies generate ad revenue. The UK recently signaled it plans to start its own inquiry, according to Bloomberg.

Alphabet’s Google has been a target of EU antitrust investigations for almost a decade, racking up €6.7 billion in fines over how it displays rival product search ads and strikes pacts to distribute search and browser apps on phones. 

A third probe, into its AdSense advertising service, is “approaching the end,” Vestager has said. Google warned of “significant uncertainty” on its outcome.

In that case, the EU has taken aim at contracts that prevented Google customers accepting rival search ads, required them to purchase a minimum amount of ads from Google and to place its ads prominently.

Mr Ryan said in his letter that potential problems go far beyond the AdSense case or what smaller European authorities are doing. 

In 2017, Google brought in around €25 billion in European digital ads, according to estimates from Pivotal Research Group. Google and digital rival Facebook accounted for 71% of the entire European market. 

Johnny Ryan also pointed to how some companies gain an unfair advantage from the user data they already have. 

“This may also create barriers to entry for existing and potential competitors and create a serious competition issue,” he said in the letter. 

Amazon.com’s use of data is already under scrutiny from the EU which is checking whether it gathers information on bestsellers from companies that use its marketplace platform and then launches its own rival versions. 

Commissioner Vestager has said she wants to know if Amazon’s ability to collect and sift through masses of sales data may be hurting the “small guy.”

Still, EU regulators may be reluctant to wade into advertising as the market changes rapidly, with people watching content on and offline. That means that a near-monopoly on the web may face stiff competition elsewhere. 

Outside Europe, Australia is looking at how digital platforms affect media and advertising, and in the US the Federal Trade Commission held a hearing in November on the economics of online advertising. 

Even this year, Facebook’s chief executive Mark Zuckerberg had to explain at a Senate hearing how the company makes money. “Senator, we run ads,” he said.





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