Joel Trenaman: Antitrust strain on Google’s advert enterprise is a decade too late

Breadcrumb Trail Links

For at least a decade, it seems regulators are wrong about Google. Was there a lack of political will?

A complaint filed on January 14, 2022 by 17 US state attorneys general alleges that Google used its digital advertising tools to deceive web publishers and rake in huge profits from market manipulation. A complaint filed on January 14, 2022 by 17 US state attorneys general alleges that Google used its digital advertising tools to deceive web publishers and rake in huge profits from market manipulation. Photo by David Gray/Bloomberg

content of the article

An ambitious lawsuit against Google continues to gather momentum as a New York court unveiled more previously redacted texts alleging the company used its digital advertising tools to fool web publishers and rake in huge profits from market manipulation.

display

This ad has not yet loaded, but your article continues below.

content of the article

The antitrust case began in December 2020 and continued in October 2021, when a ruling officially unveiled Jedi Blue’s preferential deal with Facebook, and continued with the amended lawsuit, filed Jan. 14 by 17 US state attorneys general. another twist. This latest text from the case provides new details about the alleged mechanism of ad auction bias, in which “Google’s efforts to ‘protect’ advertisers were therefore a direct redistribution of advertising money to Google’s own ad exchanges of no real benefit to advertisers.”

How did we get to this state of market dominance? How has Google advertising grown to account for 80% of parent company Alphabet Inc.’s revenue, which equates to about $147 billion in 2020? Well, it bought up the best and brightest companies and assimilated their tools and expertise to keep pushing the technology while doing its best to stay in control. It has benefited from political cycles in which mergers, corporate consolidations and antitrust repercussions were not high priorities, and has resisted attempts by regulators to discipline it over alleged leaks. Much of the public fell in love with the flashy “free” products being offered without realizing the costs: privacy and competitive alternatives.

display

This ad has not yet loaded, but your article continues below.

content of the article

How did we get to this state of market dominance?

From 2004 to 2018, Google bought more than 200 companies. In 2007, the Federal Trade Commission (FTC) gave the company’s then-most expensive acquisition — DoubleClick — a thumbs up, which it bought for $3.1 billion. It was a pivotal point in a series of massive victories for Google’s web advertising ambitions. With AdMob (ads on mobile devices), Teracent (audience data platform) and Invite Media (ad bidding interface), the acquisition of key competitors and industry upstarts has been accelerated.

One of the companies Google bought in 2011 was Admeld, a supply-side display advertising platform and ad exchange. At the time, an industry analyst called the purchase a move to “knock out a competitor in the business of enabling real-time bidding (RTB) for publishers and gaining incremental liquidity and volume in a combined exchange.”

display

This ad has not yet loaded, but your article continues below.

content of the article

Despite warning signs of consolidation, the U.S. Department of Justice closed its antitrust investigation into the purchase, yet stated, “The division will continue to vigorously enforce antitrust laws to ensure transactions impact developing markets such as display and other forms of online advertising.” and search in no way inhibit competition or innovation.” Discuss false promises.

Also in 2011, the FTC launched an investigation, in part because Google’s web competitors complained to search engines and advertisers like Microsoft, Yahoo, Yelp, and eBay that they were being suppressed. The competition authority found that Google used deception and breached its own privacy promises in an attempt to launch the social network Buzz.

display

This ad has not yet loaded, but your article continues below.

content of the article

  1. Google and Facebook are said to have reached an agreement in the advertising market that US lawyers believe violates antitrust law.

    Joel Trenaman: Facebook’s ‘illegitimate’ deal with Google is a bigger threat than whistleblower revelations

  2. The remains of a self-driving Tesla vehicle are seen after it crashed in The Woodlands, Texas on April 17, 2021, killing its two male passengers.  The US National Highway Transportation Safety Administration is investigating a series of serious accidents involving autonomous vehicles.

    Joel Trenaman: Are we on the right track with self-driving cars?

It acted to discipline the company over some allegations and reached settlements, including asking Google to “implement a comprehensive privacy program.” At the same time, the regulator also relied on similar practices on Facebook: promising information and data would remain private, but then make it public or share it with third-party apps.

In 2012, the FTC again pressed Google for a settlement over allegedly sneaky, unauthorized placement of its advertising cookies on Apple’s Safari browser. This time, a penalty of $22.5 million was paid without admission of guilt.

display

This ad has not yet loaded, but your article continues below.

content of the article

2013 saw another scolding from the FTC, this time over patents, misappropriation of web content, and allowing advertisers fair access to their data for use with competing platforms. (Google’s control over APIs.) But no legal action.

For at least a decade, it appears regulators got it wrong at Google: using a soft touch, insignificant penalties, and hopeful, chilling language — in hindsight, it seems governments denied the company was operating in so many different markets could achieve hegemony. Or was there a lack of political will? Now Google is one of the largest web publishers and the largest ad buyer at the same time. It also represents both ad buyers and sellers through its services and exchange, allowing it to control the majority of bidding and pricing data.

display

This ad has not yet loaded, but your article continues below.

content of the article

It seems regulators are wrong about Google

The states’ lawsuit asks the court to order an injunction and “structural relief” to restore competition and for Google to return customers’ money and data. Structural easing could mean forcing Alphabet to divest assets or intellectual property to other companies (which might one day have a real chance to compete).

Congress has taken some anti-monopoly positions after a two-year bipartisan review of competition in digital markets, and the watchdog has finally turned more aggressive. The FTC fined Facebook $5 billion in 2019 for violating that toothless 2012 consumer privacy order and, among other things, just got the green light to prove Facebook illegal had a monopoly over personal social networks.

display

This ad has not yet loaded, but your article continues below.

content of the article

What else could all jurisdictions do to apply pressure on multiple fronts? Enforce existing competition laws or create new ones, enact data localization rules and strengthen data protection. The EU has made some progress.

Can Alphabet and Google continue the strategies that created a giant? Well, their net income growth and technology expansion continues, they continue to acquire companies (already this year they spent $500 million on cybersecurity company Siemplify) and have more than $140 billion in cash and liquid securities ready , if they were to drag out or even settle an expensive legal dispute.

National Post

Share this article on your social network

display

This ad has not yet loaded, but your article continues below.

By clicking the subscribe button, you agree to receive the above newsletter from Postmedia Network Inc. You can unsubscribe at any time by clicking the unsubscribe link at the bottom of our emails. Postmedia Network Inc | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Remarks

Postmedia strives to maintain a vibrant but civilized forum for discussion and encourages all readers to share their views on our articles. Comments may take up to an hour to be moderated before they appear on the site. We ask that you keep your comments relevant and respectful. We’ve turned on email notifications – you’ll now receive an email when you get a reply to your comment, there’s an update on a comment thread you follow, or when a user you follow comments follows. For more information and details on how to customize your email settings, see our Community Guidelines.

Comments are closed.