Com Com to Court on Google Ads Pricing
The Commerce Commission filed a complaint with the Christchurch High Court seeking statements that consumer loan provider Moola had entered into a cartel over online advertising on Google Ads.
The Commission alleges that Moola has entered into agreements with other providers of consumer loans that they would not bid on each other’s brands on Google Ads. The Commission also alleges that agreements were made whereby companies match certain keywords negatively.
This means that consumers who search for a consumer loan provider on Google may not see ads for other loan providers.
According to the Commerce Commission, it considers that those agreements fixed, controlled or maintained the price paid by Moola for its online advertising on Google Ads and prevented, restricted or limited the purchase of online advertising on Google Ads.
Accordingly, the Commission alleges that the conclusion and implementation of the agreements violated the law on trade.
The Commission is not asking for a financial penalty in these proceedings, she said.
Earlier this year, new laws came into force that make membership in a commercial cartel a criminal offense.
The law was changed last year from a civil case to a criminal case, meaning those convicted could face up to seven years in prison or a fine of up to $ 500,000.
The law opens the door for whistleblowers to obtain immunity – if the solicitor general agrees – or leniency from the Trade Commission.
The kind of behavior that will attract the attention of the courts is price fixing or market manipulation. Last year, a Nelson pharmacy and one of its directors were fined nearly $ 400,000 for pricing.
However, Moola’s alleged violation predates the changes to the law.
Moola is a consumer finance company that offers high cost short term loans up to $ 5,000. It operates through its websites moola.co.nz and needcashtoday.co.nz.
Google search results include both organic search results and paid advertising results through Google Ads.
Google Ads is an online advertising platform offered through the Google search platform. Businesses can pay to display their products and services as an advertisement in response to a search for a particular word or phrase. The display ranking of an advertisement and the amount the advertiser pays to Google Ads is determined by a live second-price auction or spot market.
Negatively matching keywords prevent some ads from being triggered by a certain phrase word, meaning that some ads will not show to anyone searching for that phrase word.