AdTech and Google‘s Abuse of Dominance

Damage Recovery for European Publishers

In cooperation with one of the leading law firms for competition law in digital markets and litigation, Hausfeld Rechtsanwälte LLP, adClaim assists online publishers and marketers for programmatic online advertising in pursuing their claims against Google. Any company that generated revenue from the sale of online advertising space on websites or apps by using advertising intermediaries between 2014 and September 2020 may have suffered damages.

Several competition authorities around the world are currently conducting investigations into Google's practices in online advertising markets and ad intermediation. In June 2021, the French Competition Authority (“FCA”) found that Google abused its dominance in European markets for online advertising intermediation services. The FCA found strong indications suggesting that online publishers may have suffered significant damages as a result of these anti-competitive practices, for which Google is liable.‍

We offer to assess potential damage claims without any obligation and to enforce them without any cost risk.

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Next Steps

Step 1: If your company has generated revenue from sales of online advertising space since 2014 and you are interested in pursuing damage claims, you can register here. Registration is free of charge and without any obligation.
Step 2: Once you have registered your company, we will send you the relevant documents and contracts.
Step 3: If you decide to pursue your damage claims with us, please send us the signed contracts and other documents and data relevant to the proceedings.
Step 4: Once all necessary documents have been submitted, Hausfeld will review your damage claims and enforce them against Google. We will always keep you updated on the status of the proceedings.

On June 7, 2021, the French Competition Authority imposed a fine of EUR 220 million on Google. The FCA noted that Google had abused its dominant position in the online advertising market throughout the European Economic Area (EEA) by reciprocally applying more favorable conditions to its own display advertising intermediation services, DFP and AdX (now both available as “Google Ad Manager”) as compared to competing services, thereby distorting competition in its favor. The FCA found strong indications suggesting that online publishers may have suffered significant damages as a result of these anti-competitive practices. Publishers may claim these damages in a German civil court.

As a legal service provider and litigation funder, we support affected publishers in pursuing their damage claims against Google. As a team, we work closely with renowned experts to ensure an effective enforcement of your claims. If we cannot reach an out-of-court settlement with Google, Hausfeld’s lawyers will prepare a "class action" for European online publishers by way of an assignment model which has recently been declared permissible by the German Federal Court of Justice. Publishers that have suffered damages may pursue their claims against Google in German civil courts without any cost risk. The joint enforcement of bundled claims offers numerous advantages for your company, e.g., providing a broader data basis for calculating damages and, in the event that Google is willing to settle, a stronger negotiating position. We will act as the claimant, bearing all costs incurred. Only in the event of success, we would receive a share of the recovered amount which has been agreed upon in advance. If the enforcement is unsuccessful, we alone will bear all costs.

Four puzzle pieces: one for Damages Litigation Law Firm, one for Specialised Economists, one for Legal Tech Provider and one for Litigation FunderThe four puzzle pieces now together forming a whole: Four puzzle pieces: Damages Litigation Law Firm is Hausfeld, Specialised Economists is Prof Inderst and Prof Skiera, Legal Tech Provider is adClaim Platform and Litigation Funder is adClaim Funding. The middle of the circle says Hausfeld Project Management.

Highly specialized team of Hausfeld Rechtsanwälte LLP, led by Prof Dr Thomas Höppner and Dr Ann-Christin Richter

Combined expertise of economics and ad tech stack by Prof Dr Roman Inderst with his team at RCS GmbH and Prof Dr Bernd Skiera

Long-standing experience in gathering and processing of data of thousands of companies from all over Europe

Bearing the cost risk by adClaim and fair commission levels

adClaim will appear as the sole claimant against Google

Background

Google’s abuse of market power

The functioning of the online advertising intermediation markets, and in particular the crucial role of Google, has drawn the attention of competition authorities worldwide. Only recently, the President of the German Federal Cartel Office Andreas Mundt stated: „Google’s prominent position combined with the system’s lack of transparency due to the use of complex technology leaves the company with an unusually large scope for shaping the competitive process in its favour.“ About a year ago, the European Commission opened a formal antitrust investigation to assess whether Google favors its own ad tech services, to the detriment of competing providers of advertising technology services, advertisers and online publishers. In these proceedings, Hausfeld partner Prof Dr Thomas Höppner also represents the publishers’ interests. In the US, the government authorities are currently also taking action against Google for these practices („Texas Complaint“). Meanwhile, the French Competition Authority (Autorité de la Concurrence) already concluded its proceedings on June 7, 2021 and imposed a fine of EUR 220 million on Google. The FCA noted that, at least from January 2014 until September 2020, Google had abused its dominant position in various markets for online advertising intermediation services throughout the European Economic Area (EEA). By reciprocally applying more favorable conditions to its own display advertising intermediation services at various market levels as compared to competing services, Google distorted competition in its favor.

Google did not contest the decision and accepted the fine (settlement). Google committed to cease the anti-competitive practices identified, at least in France (commitments), and also announced that it will refrain from such practices throughout the European market. Injured parties can sue for damages in Germany on the basis of the French decision. However, since the FCA did not rule on damage claims, the injured parties must assess and prove the damages they have incurred on their own and enforce them in court. Due to the legal and economic challenges, this requires special expertise.

The Ad Tech Stack and Google's market position

Graphic for Ad Tech Stack. Supply Side is: Publisher, Publisher Ad Server, SSPs. Sell Side is: DSPs, Advertiser Ad Server, AdvertiserGraphic for Google's position in Ad Tech (approximate market shares). Publisher Ad Server is 90%, SSPs is 60%, DSPs is 60% and Advertiser Ad Server is 90% by Google
Source: Höppner/Volmar/Westerhoff (Hausfeld), The French Competition Authority fines a Big Tech company €220 million for abuse of a dominant position through self-preferencing in the ad tech industry (Google AdX / Google DoubleClick for Publishers), 7 June 2021, e-Competitions June 2021, Art. N° 102324 (nominiert für den Concurrences 2022 Antitrust Writing Award)
Google has a dominant market position at all levels of the ad tech stack with market shares between 60-90%. This dominant position allowed Google to implement two abusive practices which illegally favored its own intermediation services over its competitors:

Google's DoubleClick for Publishers ad server ("DFP") granted Google's own bidding platform AdX more favorable terms and conditions as compared to competing platforms (supply side platforms or "SSP"), e.g., in that in certain periods of time

  • DFP allowed AdX to exclusively bid in real-time, while competitors were only considered with estimated bids;
  • DFP shared information about the highest bid with AdX, allowing AdX to outbid competitors' bids by just one cent;
  • DFP charged third-party services fees that AdX was not required to pay and imposed more restrictive contractual limitations on them.

Reciprocally, AdX favored Google's own DFP ad server by means of a preferential interoperability, e.g., in that

  • AdX exclusively granted DFP real-time access to its content;
  • AdX exclusively granted full interoperability to DFP.

Online publishers were harmed

In an initial rough estimate, experts have determined that publishers in the European Economic Area may have suffered damages totaling several billion euros. In the absence of Google's abusive behavior, publishers would have been able to generate higher revenues from the sale of advertising space and pay lower fees. Favoring its services made it much more difficult for competing SSPs to offer a product as competitive as Google's. As a result, publishers only had limited options for alternative providers in terms of quality. Due to reduced competition and asymmetric information, Google was also able to control fee structures so that online publishers ultimately had to pay excessive fees for the mediation of their advertising space.
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