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Thursday, February 1, 2018
German Cartel Authority Launches Inquiry Into Online Advertising Sector


The Bundeskartellamt, Germany's anti-trust regulator, has launched a sector inquiry into the online advertising sector, responding to concerns expressed by advertisers and publishers.

The Bundeskartellamt said that it would focus on the "effects of current and foreseeable technical developments on the market structure and the market opportunities of the various players," and would "examine the significance of different technical services and the way in which they function." These include options for measuring visibility, collecting data and preventing fraud as well as services more on the level of the actual marketing and procurement of ad spaces.

The authority will also examine whether, as some market players claim, closed systems of a few large providers actually exist and what significance these systems have, if any.

Andreas Mundt, President of the Bundeskartellamt: "Online advertising has experienced an extraordinarily high rate of growth in the last 20 years. The market volume in Germany alone is estimated at five to nine billion euros. Due to the great economic importance of this sector for advertisers and content providers active on the Internet and in view of discussions about the difficult competitive environment in this market, we have decided to examine this sector. Today online advertising is a complex system of very different forms of advertising which is highly technical. One example of this is the fully automated real-time trade in advertising space. At the same time large single companies with considerable market relevance like Google or Facebook have emerged which, in the view of some market players, have been able to set up closed systems, so-called "walled gardens". The issue of access to and the processing of data is also highly relevant from a competition point of view"."

As a first step, the German authorities will hold discussions with various companies from the business communities concerned to gain a close insight into their individual views on the above aspects and to limit the scope of the investigation. First questionnaires will be sent out to market participants this spring, Germany's Federal Cartel Office added.

Google and Facebook are estimated to have taken half of online ad revenue worldwide in 2017 and more than 60 percent in the United States, according to research firm eMarketer.


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