Rivals have apparently complained about Google’s practices over display advertising, particularly in relation to the DoubleClick subsidiary that it purchased in 2007. At that time, the FTC voted 4-1 to approve the merger, but stated, “We will closely watch these markets and, should Google engage in unlawful tying or other anticompetitive conduct, the commission intends to act quickly.”
Over the ensuing years, Facebook emerged as Google’s biggest competitor. Precise figures vary between different companies, but Facebook’s current market share is thought to be between 10% and around 15%. What isn’t contested is that for the first time Google’s share overtook Facebook last year, and is expected to pull ahead more substantially over the next few years. With these figures it is little wonder that rival companies would complain over what they consider to be anti-competitive practices, nor that the FTC would be forced to consider a new investigation.
The accusation, reports Reuters, is that Google is “leveraging some of its most popular DoubleClick products, such as the ad managing system which has an estimated 80 percent of the market, to push websites to use other products, including Ad Exchange where websites swap ads.” This would be the ‘unlawful tying’ that the FTC promised to monitor.
“The practice of tying, or bundling, products and services together,” reports Bloomberg, “may be a violation of antitrust laws if the company in question has the market power to force customers to acquire products or services together that they might prefer to buy from different providers, said Spencer Waller, an antitrust law professor at Loyola University Chicago.”
For now this is just conjecture based on unnamed informants for both Bloomberg and Reuters. Neither Google nor the FTC have commented. It seems likely, however, that an informal investigation has already started or is likely to start in the near future. Whether this moves on to a formal investigation will depend on findings. It is worth noting, however, that Microsoft faced antitrust ‘tying’ actions in both the US and Europe over its initial practice of effectively limiting Windows users to the Internet Explorer browser. Earlier this year Microsoft was hit with a $730 million fine for failing to abide with the settlement terms it had agreed with the EC. Antitrust can be expensive.