The French Competition Authority’s Decision on Meta’s Commitments
Introduction
The French Competition Authority (Autorité de la Concurrence), within the scope of the competition law proceeding initiated upon the complaint of Criteo SA (“Criteo”), accepted the commitments proposed by Meta Platforms Inc., Meta Platforms Ireland Ltd., and Facebook France (together “Meta”) in order to address the competitive concerns in the French market regarding the online advertising sector.[1] The decision is noteworthy as it demonstrates Meta’s strong position in the social media and advertising services market. It is also significant as the decision constitutes the first case where a worldwide competition authority has accepted commitments proposed by Meta.
Information on the Undertakings
The complainant Criteo is a French company operating in the field of online advertising. By means of the technologies it has developed, it provides advertising mediation services to its customers in order to improve the placement of their ads on various platforms such as Facebook and Instagram, through the retargeting method.
Meta, on the other hand, offers a variety of products and services to internet users, advertisers and developers. Meta provides advertisers with its own ad inventory (Facebook, Instagram and Messenger). Additionally, it provides publishers with the Meta Audience Network advertising network service.
Recap of the Process
Since 2016, Meta has offered certain application programming interfaces (“APIs”)[2] to various intermediary undertakings, including Criteo. Criteo uses these interfaces to improve bidding and campaign performance tracking. In 2018, Meta ceased to provide such services to undertakings, including Criteo.
In addition, Criteo was prevented from being a “Facebook Business Partner” (now “Meta Business Partner”). This partnership allowed undertakings to benefit from the system in order to improve their service quality, gain easier access to interfaces and increase their reputations in the eyes of their customers. The partnership is perceived by advertisers as a guarantee of quality in terms of campaign management, technical expertise and know-how.
Based on all these actions, Criteo filed a complaint with the French Competition Authority. The complaint alleged that Meta abused its dominant position, and that Criteo was unable to fully use its own technologies to conduct its business due to Meta’s practices.
Competitive Concerns
As a result of its assessment, the French Competition Authority concluded that Meta’s various applications raised competitive concerns in the “non-search-related online advertising” market in France. Since the share of Meta in this market was 49% in 2018 and 50% in 2019, Meta is considered to be in a dominant position.
As for the competitive concerns, the Authority first evaluated Criteo’s removal as a Facebook Business Partner in 2018. Criteo’s removal from the program in question was interpreted as a failure to comply with criteria such as objectivity, transparency, predictability and consistency in terms of access.
Another competitive concern was that Meta sales teams had conducted practices against Criteo since the end of 2017. The Authority held that these practices had prevented Criteo from re-entering the Facebook Business Partner program.
Finally, in 2018, Meta blocked Criteo’s access to an API called “User-Level Bidding”, which was made available to a limited number of companies for trial purposes. The API allowed Criteo to use its own bidding and product recommendation technologies to optimize retargeting offers within the Meta advertising ecosystem. In this context, the blocking of Criteo raised concerns about the transparency, impartiality and non-discriminatory nature of the terms of access to Meta APIs.
In light of the considerations stated above, the French Competition Authority determined that the competition between online advertising providers who want to place their ads in Meta’s inventory was distorted. Similarly, due to Meta’s strong position, there was a question of whether a foreclosure effect exists for intermediary undertakings such as Criteo, which compete with the retargeting services developed by Meta.
Meta’s Commitments
In order to eliminate these concerns, Meta proposed commitments. After evaluating these commitments, the French Competition Authority accepted them, concluding that they could be effective in addressing competitive concerns. The commitments include all advertising service providers participated in at least one advertising campaign targeting Meta’s service users in France during a period of one hundred and eighty days. The commitments proposed by Meta are set forth below:
Conditions of Access to the Partnership Program
Firstly, Meta committed to provide access to the Meta Business Partner program to companies operating in the field of advertising services (“AdTech”).[3] Meta considered that such access will be subject to various quantitative criteria, such as the amount spent on advertising campaigns. In addition, Meta committed to automatically re-include undertakings that were previously included in the partnership program.
Training of Sales Teams
Secondly, Meta committed to provide compliance training to its sales teams regarding their communications made with their advertising clients. Employees are expected to receive training every year and to answer all questions correctly in the exam they will be subjected to at the end of the training. The French Competition Authority determined that the implementation of this commitment for a period of five years would be sufficient to eliminate the competitive concerns.
The Provision of a New Interface for Advertising Service Providers
Meta committed to develop a new API for advertising service providers. Available for free, the API enables personalized product recommendations to be offered on social media channels managed by Meta. The French Competition Authority envisaged that the relevant commitment will continue for a period of three years and decided that this commitment could eliminate competitive concerns as the terms of access to the API are sufficiently objective, transparent and fair. In addition, it stated that, thanks to this commitment, advertising service providers will be able to conduct their business using the methods they have chosen and to develop their customers’ advertising campaigns.
Monitoring of the Commitments
Finally, the appointment of a third party is envisaged by the French Competition Authority to monitor the commitments proposed by Meta. The person in question is to be independent of Meta, fulfill the legal requirements, and have certain qualifications in statistics and information technologies. If a breach of commitments occurs, this person should share their observations with Meta and alert Meta if necessary. In addition, the trustee shall notify the French Competition Authority in cases where it considers that Meta has breached its commitments due to the violation of principles such as objectivity and proportionality.
Conclusion
As a result of the French Competition Authority’s decision, the competitive concerns that have emerged in the online advertising sector in France due to various practices of Meta, which is considered to be in a dominant position, should be eliminated, as Meta’s commitments have been rendered binding.
- The French Competition Authority’s decision, No. n° 22-D-12, 16.06.2022.
- API is a software interface which allows two or more computer programs to communicate with each other.
- AdTech (Advertising Techology) refers to a specialized advertising technology. Specifically, it refers to the tools and software that advertisers use to deliver and measure digital advertising campaigns as well as reach audiences.
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