While the "products" that the parties offer do not compete directly, the combination of these products are substitute solutions from the point of view of publishers and advertisers. As explained above, publishers (and advertisers) can sell (purchase) advertising space through different channels: direct sales, intermediated unbundled sales and intermediated bundled sales (e.g. the AdSense package). There is some substitution between these channels and therefore, within this framework, Google’s "bundled" solution competes with the "unbundled" combination of stand-alone ad serving technology (such as DoubleClick’s technology) with intermediation. Given that DoubleClick is a leading provider of stand-alone ad serving technology and Google is a major provider of the "bundled" solution, the Commission assessed whether, by being a supplier of a component of the unbundled solution, DoubleClick is currently constraining the competitive behaviour of the bundled solutions provided by Google112.
The main reasons why the Commission does not believe that the parties' constrain each other in a "horizontal" sense are set out below:
(i) the cost of ad serving services represents a very small part of the total cost of unbundled solutions and therefore, the degree to which the parties' product did constrain each other's pricing pre-merger was minimal;
(ii) DoubleClick faces strong competition from other ad serving companies and these direct competitors are the main constraint on DoubleClick's pricing;
Google's bundled solution and an unbundled solution including DoubleClick's products are not close competitors.
Ad serving services represent a very small part of the total cost of unbundled solutions
The fact that different combinations of ad space and intermediation or/and ad
serving tools compete in the same market does not necessarily imply that the price of tools for ad serving is constrained by providers of ad space or vice versa. This is because in choosing between different advertising channels, advertisers and publishers consider the total cost of advertising in one channel versus the
(every customer buying ads from Google also obtains ad serving from Google and there is no category of customers buying ads from Google but using non-Google ad serving technology to serve these ads). When Google sells ad space, the purchase price includes the ad slot and the serving of the ad.
Note that there is a very minimal actual overlap in the market for intermediation of online advertising space, due to the launch in June 2007 by DoubleClick of its ad exchange which has not yet achieved full commercialization. It is therefore unlikely to exert presently any actual significant competitive pressure on Google's intermediation activities. It could not be excluded, however, that absent the merger, such an exchange would have become a significant competitor in intermediation of online advertising space. In view of this, this issue will be examined below in assessing potential competition concerns. (see paragraphs 222 et seqq.).