Online advertising: Facebook avoids a fine against Criteo

The Competition Authority put an end to an old dispute between Facebook and Criteo on Thursday. For more than three years, the French leader in targeted advertising has suspected the American company of having excluded him without reason from one of its advertising programs, the “Facebook Marketing Partners”. After investigating the case, the college of the authority considered that Meta, the group of which Facebook is a part, had made sufficient commitments to end the procedure and bury all the proceedings.

The American giant avoids a heavy sanction. After consulting most digital advertising players, the French antitrust authority ruled that the market test undertaken with several advertising players, including Criteo, responded to their concerns. After participating in this long market test, which began in June 2021, Facebook has committed to being more transparent about the rules for affiliation to its partnership program and to preserving “objectivity, transparency, predictability and stability” of its conditions of access.

Three years and after?

For five years, Facebook will have to meet a series of five commitments across all of its platforms, including Facebook and Instagram. For example, it will be asked to provide advertisers with a new programming interface (API), entitled “Recommendation functionality”. This tool will be open to all service providers to recommend their products on its social networks and adjust the price of their advertising auctions as best they can. Its sales teams will also be better trained. And an independent trustee appointed to ensure that these promises are fulfilled.

What if Facebook didn’t respect them? “In this case, the authority would hit harder,” warns Henri Piffaut, vice-president of the Competition Authority (ADLC). “By this decision, we especially wanted to go as quickly as possible and restore healthy conditions of competition”, specifies Benoît Coeuré, the new boss of the Authority. “We consider that this decision extinguishes most of the concerns that were raised in September 2019 by the referral to Criteo”, insists the successor to Isabelle de Silva, at the head of the institution since January.

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The brothers who are enemies of advertising will be able to reconcile after five years of outright hostility. “Criteo will finally be able to go back to business with Facebook”, slips us a close friend of the file. In 2017, the break had been, to say the least, shattering. While access to Facebook’s APIs had been blocked, Criteo had been prevented from measuring the performance of its advertising campaigns on the social network. The company then fell 11% on the Nasdaq following a note published in September 2018 by the bank Goldman Sachs.

A heavy sanction, badly experienced by the management team at the time. Excluded from the status of “privileged partner”, the French start-up then turned to the Competition Authority to denounce the attempts at “denigration” of which it considered itself a victim on the part of Facebook. “Emails” and “exchanges” have thus been identified, during which Facebook’s sales teams had tried to dissuade potential customers from entering into contracts with Criteo since the end of 2017.

Meta in a position of strength

“We are very pleased with today’s decision (…) and look forward to partnering with Meta again to buy advertising inventory on their platforms,” said Ryan Damon, Criteo’s Chief Legal Officer. The market that is once again opening up to Criteo comes at the right time, as the company must at all costs reinvent its model and deal with the disappearance of cookies. These small hidden files, stored in Web pages, which the company uses to target Internet users browsing from one site to another.

Meta’s hold on the advertising market makes Facebook a must-have for advertisers. According to the e-pub observatory, Meta already occupied 50% of the digital advertising market in France in 2019. An activity in which the group has invested heavily under the influence of Sheryl Sandberg, the former right arm of Mark Zuckerberg, who helped raise Facebook to the rank of advertising giant. Last year, Meta made nearly $114.7 billion in advertising revenue, neck and neck with Google, the other colossus in the sector with $127 billion.