French Look at Online Ad Dominance Enjoyed by Google, Facebook

By Sam Schechner

France's competition authority on Monday opened an inquiry into possible antitrust issues in the online-advertising market, saying it will examine the market power of Facebook Inc. and Alphabet Inc.'s Google.

The Autorité de la Concurrence said its inquiry, which it expects to complete next year, will examine the role of the thicket of firms that help advertisers and websites buy and sell ads targeted at people and based on their demographic backgrounds and Web-browsing habits.

The probe will also look at whether some firms, including Facebook and Google, have dominant positions in the online advertising market, which continues to grow rapidly.

The probe highlights the growing interest by European antitrust regulators in the role played by big Internet companies and the large sets of personal data they collect about individuals. Germany's competition authority earlier this year opened a probe into whether Facebook abuses its dominance as a social network to get users to give up personal information.

The European Commission, the European Union's executive arm, is investigating Google's advertising contracts, after filing two sets of charges against Google for alleged abuses of dominance in other areas.

A Facebook spokesman declined to comment, but in the past Facebook said it is confident it complies with the law. A Google spokesman did not immediately respond to a request for comment. In the past Google has denied EU antitrust charges against it and said it follows the law.

In 2015, Google and Facebook together accounted for 43% of global net advertising revenue online, according to an estimate from market-research firm eMarketer.

A French sector inquiry doesn't begin with the assumption that there is a market problem that needs resolution or there is anticompetitive behavior. The competition authority didn't allege any such behavior when it announced its sector inquiry on Monday.

But France's competition authority, one of the world's most active, has at times issued recommendations and launched antitrust probes into companies on the back of such sector inquiries.

It isn't illegal in Europe to have a dominant position, but it is illegal if a company uses it to thwart competition.

Write to Sam Schechner at sam.schechner@wsj.com

(END) Dow Jones Newswires

May 23, 2016 16:32 ET (20:32 GMT)

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