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    Home » In-depth » Google antitrust road map heads to DoJ with US suit looming

    Google antitrust road map heads to DoJ with US suit looming

    By Agency Staff18 May 2020
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    Google’s dominance of the US$130-billion digital advertising market is harming advertisers, news publishers and consumers, according to a paper that outlines how the US could bring an antitrust case against the Internet giant.

    The analysis sets out how Google used a series of acquisitions to build a controlling position in the technology ecosystem that delivers ads across the Web, and now uses that power to exclude competitors and monopolise the market. The end result is that buyers and sellers of ad space have no choice but to go through Google — and are losing money in the process, the report says.

    “What we can see is troubling and concerning,” said Fiona Scott Morton, a Yale University economist and one of the authors of the paper. “There’s a lot of public evidence that suggests anticompetitive conduct and significant harm to consumers and competition.”

    There’s a lot of public evidence that suggests anticompetitive conduct and significant harm to consumers and competition

    The paper comes out of a research project into technology platforms funded by the Omidyar Network, an organisation co-founded by eBay billionaire Pierre Omidyar that’s one of a number of philanthropy groups funding research and public-interest campaigns promoting stronger antitrust enforcement.

    Billed as a road map for bringing a monopolisation case against Google, the report comes as the US justice department is drafting a lawsuit against the company, accusing it of antitrust violations. The department’s antitrust division and state attorneys-general have been investigating the company since last year over its conduct in the digital advertising market.

    Conduct

    While it doesn’t unearth new facts about Google — its dominance of the digital advertising ecosystem stretches back years — the paper summarises in detail how Google’s conduct could be violating antitrust laws.

    Washington-based tech policy organisation Public Knowledge, which is running the research project funded by Omidyar, plans to share the paper with the justice department and the states.

    The paper focuses on the display ads that appear across the Web. Google, a unit of Alphabet, owns much of the chain of technology tools that connects advertisers like Procter & Gamble to publishers like ESPN.com, enabling the instant delivery of ads as users visit a website.

    That control is gaining more urgency as media companies grapple with a sudden advertising slump due to the coronavirus outbreak. Layoffs are ravaging the industry, from traditional publishers like Conde Nast to online outlets like Vice and Quartz.

    The paper estimates that Google, by acting as an intermediary between advertisers and publishers, is able to pocket about 40c of every advertising dollar before it gets to publishers. That is likely higher than what it would earn in a competitive market, the report says.

    “Many people believe Google Search to be the world’s best search engine,” the authors write. “The argument here, however, is different. It is about how Google has used the market power it already had in search as a springboard, for more than a decade, from which to deploy an ever-increasing number of interrelated anticompetitive tactics, all of which build on prior moves.”

    It is about how Google has used the market power it already had in search as a springboard, for more than a decade…

    Google counters that the ad tech industry is “famously crowded”, with competitors that include major companies like Amazon.com, Facebook, AT&T and Oracle. Advertisers and publishers use multiple platforms to buy and sell ad space, it said.

    “Competition is flourishing, and publishers and marketers have enormous choice,” the company said in a blog post in 2019.

    The report outlines 20 instances of conduct by Google that the authors say support a monopolisation case against the company. The examples include preventing Google’s technology from interacting with that of rivals, raising the costs of its competitors, and resisting transparency that would benefit publishers and advertisers.

    Forced

    In one case, when Google faced the competitive threat of a new advertising bidding process adopted by publishers, it revamped its own auction process in a way that raised costs for competing platforms by up to 10%, which then lowered payments to publishers. But publishers were effectively forced into the arrangement because to get priority in Google search results on mobile devices they had to adopt a format that forced them to use Google’s bidding process.

    Scott Morton said what’s “particularly troublesome” for publishers is that they depend on Google to sell ad space, even as they compete against company’s various properties like YouTube to win advertising business.

    “What Google is doing by monopolising the ad-tech sector and the open Web is giving publishers and advertisers only one choice,” she said.  — Reported by David McLaughlin, (c) 2020 Bloomberg LP



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