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competitor suggested that Google-DoubleClick might refuse to allow DFP to serve ads from competing ad networks (as an extreme form of raising rivals' costs).

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The quality of DoubleClick's ad serving tools when used with competing networks could be degraded by the use of means such as making the DoubleClick tools technically incompatible with other networks, by failing to develop codes to allow interoperability with new ad networks/exchanges, by serving ads more slowly on competing ad networks or by refusing to offer certain services.

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A number of respondents have suggested that Google might offer DoubleClick tools for free when used on AdSense in return for exclusivity agreements or the right of "first-look" to remnant inventory. Under a pure bundling strategy, the merged entity might only sell DoubleClick tools if used alongside AdSense. Under a mixed bundling strategy, the price of DoubleClick tools would be lower (even free) for publishers committing to market all or a certain share of their advertisements or their “remnant” inventory via AdSense.

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The ad arbitration mechanism is the process by which ads are selected to be served on a given web page based on the rules determined by the publisher. Currently, DoubleClick's ad arbitration is considered to be neutral with regard to competing intermediation networks in the sense that it does not give any preference to a network but simply follows the instructions inputted by the publisher.

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Or degrade the quality.

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We focus on the strategies relating to DFP. A similar analysis can be undertaken for DFA.

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In this case, a "liquid" intermediation platform (ad network or ad exchange) would allow publishers to quickly and easily find advertisers to sell their inventory to and advertisers to quickly and easily find the appropriate inventory for the placement of their ads.

degrading DoubleClick tools' quality when used with competing ad networks143

,

    • (iii)

      bundling DoubleClick tools with Google's intermediation services (either through pure or mixed bundling144) and finally (iv) "tweaking"145 the ad arbitration mechanism to serve ads in favour of AdSense. The exclusionary strategies arising from the "vertical" dimension of the merger include input foreclosure (that is to say the refusal to sell or raising rivals' costs) in the sale of ad serving tools to ad networks that compete with AdSense.

  • 290.

    All the theories of harm have a similar thread: if the merged entity was to increase the relative price146 of using DFP147 on competing networks, bundle DFP with AdSense or use other non-price strategies to attract inventory, most DoubleClick customers would move part of their inventory to Google AdSense thus reducing the inventory available to other ad networks. Indeed, in view of (allegedly) high switching costs, DFP customers would be unable to respond to such foreclosing strategies and would be compelled to move part of their inventory to AdSense or stop using other networks altogether. Given that online advertising is a two-sided market characterized by network effects, scale and access to user data are important ingredients of success. Through the foreclosure strategies, the merged entity would deny sufficient scale and liquidity or, in other words, the ability to find easily and quickly a counterpart with which to trade148, to competing networks which would consequently be weakened. As the network of the merged entity would become larger and "information-richer", it would attract more publishers and more advertisers up to the point where the market would "tip" in favour of the network of the merged entity, enabling it to raise the price of its offering. In view of its large scale and access to CPI, the network of

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