France says Google in 'dominant' position

France's competition authority said Tuesday that Google occupies a strongly dominant position in the online advertising market linked to Internet searches and that it possibly violated competition law.

Following a review requested by the government, the Autorite de la Concurrence said it "considers that Google holds a dominant position on the advertising market linked to search engines."

However, it said the dominant position resulted from a a great deal of innovation, supported by significant and continuous investments.

"Only the abusive exercise of such market power could be sanctioned," the agency said.

After analysing the online advertising market, it said it had "identified possible exclusionary conduct intended to discourage, delay or eliminate competitors ... and possible operational abuses," by Google.

Overall, it listed 14 concerns regarding Google's dominant position.

The agency stressed it was providing its opinion only on a consultative basis and was making no ruling on the legality of the practices.

Moreover, it noted that the European Commission has just initiated a formal investigation regarding Google that should resolve many of the issues that have been at the centre of complaints by Google competitors and clients.

It suggested targeted responses and applying competition law to Google rather than there being a "need to implement sector-wide regulations."

Google in response called the analysis "too narrow" as online and offline ads are in competition.

"Search ads are one of many options for advertisers. If the price of search ads rises, advertisers can and do switch to other formats, both online and offline. That's the sign of a competitive and dynamic industry," Google said in a statement.

(c) 2010 AFP