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Google has been fined €220m (£189m) by French competition regulators for abusing its dominance in the online advertising market in a landmark settlement that could rebalance the relationship between tech giants and digital publishers.

The settlement with the French competition authority, which found that Google unfairly favoured its own tools for buying and selling adverts online over those of rivals, marks the first time the Silicon Valley company has agreed to make changes to its practices as a result of the investigation.

“Google used its vertically integrated business model in display advertising to gain an advantage over other competitors,” said Isabelle de Silva, the president of the authority, on Monday. “This is the first investigation in the world that examines the display advertising space where Google is dominant, and the first time Google has agreed to a settlement with engagements. This case will be of interest to other regulators who are looking at the online ad market and technologies.”

In a blog post, Google said it would make changes to Ad Manager, its platform used by large publishers, and alter how it operated with its AdX exchange, where online ad space is auctioned. The French regulator said that Ad Manager shared pricing information on rivals to give AdX an advantage over other auction platforms.

“We have agreed on a set of commitments to make it easier for publishers to make use of data and use our tools with other ad technologies,” said Google, which does not intend to appeal against the decision. “We will be testing and developing these changes over the coming months before rolling them out more broadly, including some globally.”

The French regulator said its decision could open the way for publishers who felt disadvantaged to seek damages from Google. “The decision to sanction Google is of particular significance because it’s the first decision in the world focusing on the complex algorithmic auction processes on which the online ad business relies,” said de Silva.

The case started with a complaint in 2019 from News Corp – publisher of the Times, Sun and Wall Street Journal, the French newspaper Le Figaro and Groupe Rossel of Belgium. Le Figaro withdrew from the case in November last year.

In February, News Corp struck a global news deal with Google in an extensive commercial agreement.

“We haven’t been involved in the case in France since we concluded our deal with Google in February,” said a spokesperson for News Corp. “But we remain pleased by the progress of our global partnership, and are hopeful for a long and fruitful relationship in the years ahead.”

The French finance minister, Bruno Le Maire, welcomed the decision, which could help rebalance the power the tech giants have in advertising.

“The practices put in place by Google to favour its own advertising technologies have affected press groups, whose business model is heavily dependent on ad revenues,” he said. “These are serious practices and they have been rightly sanctioned.”

Google, which is owned by its parent firm Alphabet, has a history of breaching European advertising rules. In 2019, the company was fined €1.5bn by the EU for blocking rival online search advertisers. In 2018, the EU competition authority fined the company a record €4.3bn for using its Android mobile operating system to block rivals. A year earlier, Google was hit with a €2.4bn fine for hindering rival shopping comparison websites.

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