IPA prepares to take on Google

The IPA is considering legal action over the search giant's plan to scrap agency commission payments.

The row over Google's plan to scrap agency commission payments has intensified, with the IPA set to take action against the search giant.

The IPA's Digital Marketing Group will meet on Monday to discuss a course of action against Google after it announced plans in September to scrap a monthly commission-based system in favour of quarterly performance-related payments.

Possible routes forward for the IPA include legal action against Google or an attempt to get the Office of Fair Trading involved on the grounds that Google is abusing its dominant market position. Google controls around 40 per cent of the search medium's revenue.

An IPA source said the meeting is likely to decide to lobby for a referral to the OFT, adding: "The main issue about cutting commission is that it's setting a precedent."

Many agencies believe that Google's rivals such as Yahoo! and Overture will follow suit. However, Yahoo! has said that it plans to keep its commission system in place.

The IPA's fightback against Google's move, which is set to kick in from 1 January, is being led by Wayne Arnold, the vice-chairman of the IPA's Digital Marketing Group and managing director of Profero.

The trade body has said the move will enable Google to discriminate against smaller agencies.

However, Google has argued that a 15 per cent commission payback is not sufficiently transparent.

The IPA met with Google in October to raise its concerns over the planned changes.

Arnold said: "The agency commission system has worked well in the UK, both from an IPA and ISBA point of view. What Google is planning is detrimental to itself and to advertisers."