Firstly, publishers do not dedicate a fixed amount of advertising space to direct or intermediated sales but the choice will depend on the value that the publisher is able to extract from the sale of space – if the net profit from selling a given space through intermediation was to increase (for instance if the intermediation fee was to decrease) – a publisher could decide to sell through an ad network rather than directly. Secondly, the costs that an intermediary such as Google would have to bear in order to identify publishers that cannot sell directly and charge them higher prices would be excessively high. Thirdly, small publishers could start selling their ad space directly very easily, on the basis of the guidance and information available on the internet.
In fact, Google's AdSense network has two main (identifiable) categories of clients: large publishers with directly negotiated contracts and smaller publishers signing up for Google's standard online contract. Online partners with standard online contracts account for more than [>80%]*40 of Google’s AdSense network partners41. The revenue generated from online partners accounts for [>80%]* of AdSense for Content (AFC) revenues and [>30%]* of AdSense network revenues in the EMEA region42. Nevertheless, Google claims that this subdivision would not facilitate price discrimination between publishers as Google is not necessarily aware of the distribution channels used by most of its publishers on standard contract terms.
The argument brought forward by the notifying party is not entirely convincing: the fact that publishers are clearly distinguished into two categories according to their economic strength is in itself a key element on the basis of which Google could price discriminate between them, since normally larger publishers with stronger bargaining power sell their premium inventory through direct sales.
Furthermore, during the market investigation, the overwhelming majority of Google's competitors (that is to say ad networks and ad exchanges) were actually able to provide precise indications on the share of their publisher customers that are also selling inventory through direct sales.
63. The notifying party also submitted that ad networks are currently developing sales models that are progressively becoming very close to the direct sales channels, by helping publishers to retain more control over what might otherwise be sold by intermediation. On the other hand, publishers, after having fulfilled all their guaranteed sales through direct contracts, would also use their sales forces to place ads throughout their sites in available slots ("run-of-site" sales). However, these developments are still at a very initial stage and cannot be considered to be an established market trend.
* Parts of this text have been edited to ensure that confidential information is not disclosed; those parts are enclosed in square brackets and marked with an asterisk.
As explained in greater detail in paragraph 93, Google offers its network of publishers two main products: AdSense for Content (AFC) and AdSense for Search (AFS). AFC places contextual ads onto the publisher's web pages while AFS delivers ads next to the search results of queries initiated from the search box embedded on the publisher's website.