FTC Order Preserves Competition in Digital Advertising Ecosystem as Part of Publicis’s Acquisition of LiveRamp

The Federal Trade Commission has taken steps to preserve competition in the digital advertising ecosystem by requiring Publicis Groupe S.A. to continue providing neutral and nondiscriminatory access to LiveRamp Holdings Inc.’s products and services, and to establish firewalls to prevent Publicis from accessing LiveRamp’s customer data, in order to complete Publicis’s acquisition of the company.

The proposed consent order would address the FTC’s concerns that Publicis’s acquisition of LiveRamp, which provides data connectivity services that help facilitate the secure and confidential movement of data used for digital advertising, would harm competition in the markets for media agency services and audience data services.

Under the $2.2 billion deal, Publicis, which provides media agency services including media planning and buying for digital advertising campaigns, would acquire 100% of LiveRamp. The deal would likely result in Publicis having the ability and incentive to foreclose customers of competing media agency service providers by using its control of LiveRamp to push customers to switch their media agency business to Publicis even if those customers otherwise prefer competing media agencies, according to the FTC’s complaint.

“By requiring LiveRamp to continue operating as it does today as a neutral platform, this order will ensure that Publicis does not gain an unfair advantage over its competitors in the digital advertising marketplace,” said David Shaw, Principal Deputy Director of the FTC’s Bureau of Competition. “The FTC’s action today ensures that the digital advertising marketplace can continue to grow and evolve without risking harm to competition.”

LiveRamp is the leading data connectivity provider in the U.S. media marketing ecosystem and the only provider with a full spectrum of data connectivity services. Publicis is the largest among the five major advertising agencies in the United States. It also provides audience data services through its Epsilon subsidiary that help companies target their advertising to particular audiences. The FTC alleged that combining Publicis and LiveRamp would decrease competition in the relevant markets for media agency services and audience data services in violation of Section 7 of the Clayton Act.

The FTC also alleged Publicis would deny or degrade access to LiveRamp services on which competitors rely, which would lead to higher costs and lower quality services for customers of competing digital advertising services. In addition, the FTC alleged that under the deal Publicis would gain access to competitively sensitive data of non-Publicis clients serviced by LiveRamp, which Publicis would leverage to pressure those clients to switch to Publicis.

Under the proposed order, Publicis and LiveRamp, for five years, are required to:

• Provide non-discriminatory access and support on fair and reasonable terms to LiveRamp’s standalone products and services and are prohibited from denying, degrading, delaying or impairing LiveRamp customers’ continued access to LiveRamp’s standalone products and services
• Establish firewalls to ensure that Publicis does not access or use LiveRamp customer data and confidential business information that it receives from a customer’s use of LiveRamp’s standalone products and services
• Appoint an independent auditor to audit the company’s compliance with the proposed contractual commitments every six months for the first two years after the date that the proposed transaction closes, and then once a year thereafter for the following three years

The order also provides additional protections for LiveRamp customers, including a requirement that Publicis shall not retaliate against customers that discuss compliance concerns with the Commission. Under the order, LiveRamp customers also have the option to request an audit of Publicis’s compliance with the data protection, privacy and security obligations as applied to the requesting customer. The order also provides for third-party mediation of contractual compliance disputes that remain unresolved after 30 days.

The Commission vote to issue the complaint and accept the consent agreement for public comment was 2-0.

The public will have 30 days to submit comments on the proposed consent agreement package. Instructions for filing comments appear on the docket. Once processed, they will be posted on Regulations.gov.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions.