Facebook and Google in the upcoming months may have to disclose information about their advertising systems. France’s authority agency in charge of competition is contemplating the possibility of launching an investigation into Facebook and Google since they both amass the majority of the French advertising market revenue.
According to Reuters, The regulating body from France on Tuesday is considering a full inquiry amid growing scrutiny from European authorities of the biggest internet companies. Facebook and Google’s size and leverage over data collection have made them advertising juggernauts.
“What is clear is the overwhelmingly dominant position of Google and Facebook,” president of the French competition body, Isabelle de Silva, said.
The report, compiled by the French regulating authority, found that Google and Facebook enjoyed two pivotal roles in the marketplace in France. First, both of them are publishers and intermediaries. In other words, by having the ability to act as both it gives them a competitive edge over the rest of the competition.
Elsewhere, Facebook and Google internet ad spending outside of China accounted for 76 percent. This means that this advertising dominance by both companies is the exact same scenario in France. As reported by the New York Times, the internet in France has become the No. 1 vehicle for advertisers, ahead of television.
— Reuters World (@ReutersWorld) March 6, 2018
In light of the intentions by the French agency, it is paramount that both tech companies cooperate. As the Times report explains, the agency is within its rights to impose fines if foul play has been revealed during the investigation.
“The French competition authority can impose fines of up to 10 percent of a company’s total yearly revenues. Any investigation takes about two years to reach a conclusion and any sanction.”
On the other hand, Facebook’s Director of Policy for Europe Delphine Reyre contested that Facebook is just one option for advertisers to reach audiences. Furthermore, all media players (broadcasters, traditional media, and online platforms) are tapping into sophisticated ad targeting systems to lure users. So, there are no barriers to entry for others to compete via this advertising channel.
The tax strategies used by Google, Amazon, Facebook and Apple have cost governments around the world as much as $240 billion a year in lost revenue, according to 2015 report by OECD https://t.co/W1kO4pGaJt
— AFP news agency (@AFP) March 4, 2018
At the end of January, Facebook was in the process of revamping its platform and made public its privacy principles. In the middle of February, the social media company was caught collecting data and a Belgium court ordered Facebook to stop.
At the end of May of 2018, a New European law on data protection goes into effect. These recent developments and investigations into both companies signal a shift in how businesses will have to operate on the old continent. Once the investigation is concluded, it will be interesting to watch how Facebook or Google counteract the findings by France’s regulatory authority.