Google will warn of Adwords policy changes to settle case

IDG News Service - The French competition authority closed a case against Google on Thursday, after the company promised to better inform users of its Adwords search advertising service of its policies, and to provide advance warning of any changes. The case followed a complaint from Navx, a French database publisher.

Google made formal undertakings to give advertisers three months notice of any policy changes affecting them, to provide clearer warnings if it planned to suspend the account of an Adwords user, and to clarify whether rules forbidding the advertising of radar detectors also apply to services that warn of radar locations. In return, the authority closed its case against Google.

A Google representative underlined that "the competition authority did not identify any dominant position or abuse of monopoly" in its final decision to close the case. The competition authority's preliminary decision, published in June, said that Google's behavior could constitute abuse of a dominant market position. Since Google agreed to settle the case, however, the authority did not rule on that point.

The undertakings to improve warnings of policy changes and account suspensions are only legally binding on Google in its dealings with French advertisers of radar warning products and services. However, the company promised in discussions with the competition authority to apply the same principles to advertisers in all other product segments, in any country where Google operates the Adwords service -- promises the authority said in its 24-page ruling were "duly noted."

Navx complained to the authority after Google suspended the company's Adwords account without explanation in mid-November 2009. Google later explained that it had suspended the account on the grounds that its code of practice for advertisers tells them: "Don't promote illegal traffic devices that evade traffic laws," according to documents reviewed by the competition authority.

Radar detectors that warn drivers as they approach a speed trap are illegal in many European countries, including France, but Navx neither sells nor promotes such devices. It sells a database of radar speed trap locations that can be loaded into a GPS receiver, allowing the device to give warning as the driver approaches speed traps, just as it would if the driver strayed off a programmed route.

Google has now decided that advertising radar databases is allowed and a Google representative told the competition authority that the company would not change this policy unless forced to do so by a change in the law.

That's important for Navx, the company's attorney Ron Soffer said, because otherwise Google could have just given Navx three months' warning that it was changing its policy and suspend the company's account again.

Navx used to spend five-sixths of its promotional budget on Adwords, generating two-thirds of its revenue from the ads. The suspension of its Adwords account hurt its business, it said.

Although the competition authority's case is now closed, Navx is still pursuing Google in the Paris Commercial Court for €7 million ($9.6 million) in compensation for damage to its business and to its reputation, said Soffer.

Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at peter_sayer@idg.com.