The Tribunal said part of how firms grow in the market in which Lottoland competes is by using effective advertising channels such as Google Ads.
The Competition Tribunal has included Lottoland’s reduction in revenue as one of the reasons for ordering Google to continue advertising the bookmaker.
It is alleged that Google terminated Lottoland’s access to Google Ads in September 2020, which resulted in the licensed bookmaker suffering a reduction in revenue in the amount of R69 077 665,24.
Lottoland is a licensed bookmaker, which offers fixed-odds bets on the outcome of various lotteries around the world, including the South African national lottery, sporting events, and other betting contingencies.
Lottoland takes Google to the Tribunal
The Tribunal, which is an independent adjudicative body that adjudicates on matters referred to it by the Competition Commission, previously said it will release reasons why it has ordered Google to advertise Lottoland for six months, starting 12 November.
Google Ads enables advertisers to display ads to users who use Google Search, with Google Ireland acting as the service provider for Google Ads in South Africa.
Lottoland alleged that it has been refused access to Google Ads, although it was economically feasible for Google to provide its service to it.
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Google contravenes the Competition Act 89 of 1998
Lottoland listed reasons why they are of the view that Google contravened sections 8(1)(d)(ii) and/or 8(1)(c) of the Competition Act 89 of 1998.
“Section 8(1)(d)(ii) provides that it is prohibited for a dominant firm to refuse to supply scarce goods or services to a competitor or customer when supplying those goods or services is economically feasible.
“Section 8(1)(c) provides that it is prohibited for a dominant firm to engage in an exclusionary act.”
Was there a refusal to supply Lottoland?
The document of reasons by the Tribunal outlines that Lottoland said Google refuses to supply it, while it supplied its direct competitors such as Hollywood Bets, World Sports Betting, Betway, Betfred (which owns Lottostar), and Netbet (which trades as Sportingbet).
“Google has not only proffered inconsistent reasons for the enforcement of its ‘internal policies’ as against Lottoland, but it has also enforced these policies selectively in the market in which Lottoland operates,” reads the document.
Google has argued that it has not terminated Lottoland’s access to Google Ads but that it has only refused the use of the website as a landing page for advertisements, as the website contains content that contravenes both Google’s internal policies and the Lotteries Act.
The Tribunal said Google continued to provide Lottoland’s competitors with the same or similar service.
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There is refusal
In response, Google said it was in the process of terminating the relevant advertisers’ use of Google Ads through landing pages that contravene Google’s policies.
“It is not clear to us why some providers are refused access and others are not, other than Google’s admission that there is ‘slippage’ arising from a mechanised classification system that is meant to detect problematic websites,” said the Tribunal.
The Tribunal added that they conclude the termination and restriction of access is a refusal to deal.
“The conduct prima facie distorts competition by impeding the ability of a downstream firm to expand within the market relative to its rivals in the absence of any technological, efficiency or pro-competitive gain.”
Irreparable harm to Lottoland
Lottoland has told the Tribunal that this matter has directly impacted its reach, resulting in a drop in registration of new customers.
“Furthermore, based on the seven months in which Google supplied its Google Ads to Lottoland, Lottoland estimates that it has, as a result of Google’s refusal to supply, suffered a reduction in revenue in the amount of R69 077 665,24, which losses are ongoing.”
The Tribunal said part of how firms grow in the market in which Lottoland competes is by using effective advertising channels such as Google Ads.
“Furthermore, the evidence provided by Lottoland of revenues lost appears to us to be based on sound projections using available data and is not seriously contested in terms of how the estimates have been derived or the significance of the quantum of (opportunity) losses incurred.”
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