Orlich Lawson
As the Justice Department seeks to break up Google’s ad tech monopoly, experts say the remedies sought in the antitrust case could benefit everyone targeted by online ads, not just advertisers and publishers.
The Justice Department has previously alleged that, through its acquisitions, Google dominates the ad server market, taking a significant percentage of online ad sales by linking buy-side and sell-side products. Google also allegedly corners advertisers by preventing publishers from using its sell-side platform to access its vast advertiser demand, and crowds out competitors by making it difficult for publishers to switch platforms.
The scheme also forced Google to charge higher “monopoly” fees, driving some publishers out of business and raising costs for advertisers, the Justice Department alleged.
But while the damage to publishers and advertisers has been described at length, less has been said about the significant consequences that the alleged monopoly would have on consumers: higher prices for goods, less privacy, and more low-quality advertising that frequently shows up on our screens for products no one wants.
By overcharging for online ads by as much as 5 to 10 percent, Google has imposed a “Google tax” on the prices of “everyday goods we buy,” Sasha Howarth of Tech Oversight explained at a press conference Thursday where experts closely following the case shared their findings.
“When it comes to reducing household costs, Google has overcharged advertisers and publishers by nearly $2 billion in the last four years alone. This has led to higher advertising prices and increased costs of doing business – and of course, these costs are passed on to us when we shop online,” Howarth said.
But while it’s unclear whether breaking up Google’s monopoly would result in savings for consumers, Elise Phillips, a policy adviser who specializes in competition and privacy at Public Knowledge, outlined other benefits if the Justice Department wins the case.
She suggested Google’s actions were reducing innovation and “negatively impacting the diversity and even relevance of the quality of the ads consumers see.”
Phillips suggested that breaking up Google’s advertising tech and requiring it to adopt corrective codes of conduct could increase competition and give consumers more control over how their personal data is used to target ads, ultimately leading to a future in which everyone sees better quality ads.
Rather than Google’s advertising model dominating the internet, experts suggest this could happen if a less invasive ad-targeting model were widely adopted, which could strengthen privacy and make online ads less malicious after The New York Times declared an “epidemic of junk ads” last year.
Experts suggest that as small businesses and publishers benefit from lower costs, increased revenue and greater choice, consumers may see a wider range of better quality advertising online.
Karina Montoya, a policy analyst at the Open Market Institute, said better advertising models “already exist,” such as “conceptual advertising” that uses signals that, unlike Google’s targeting, don’t rely on “vast data sets that collect everything we do across all our devices and don’t ask for our consent.”
But Montoya said it appears that “any new advertising models are being stifled and overwhelmed by the current dominant business model” that stems from Google’s tight grip on the ad tech market that the Justice Department is targeting, which Reuters reported includes the markets for “publisher ad servers, advertiser ad networks, and the ad exchanges that connect the two.”
At its most extreme, Howarth suggested that loosening Google’s grip on the online advertising industry could even “revolutionise the internet”.
One theory is that increased revenue for publishers would mean more information would be available on the open web, which would benefit consumers as well, potentially leading to a decline in paid content as desperate publishers look for ways to make up for lost advertising revenue.
Montoya, who is also a reporter for the Center for Journalism and Freedom, which monitors how media can thrive in today’s digital economy, noted that publishers’ reliance on reader funding through subscriptions and donations is not sustainable if society wants “an open, free market where everyone has access to the information they are entitled to and deserve.” The Justice Department argues that reducing Google’s control will make publishers more financially stable, and Montoya hopes the public is beginning to see how that benefits the open web.
“This case puts Google’s pattern of retaliatory behavior on full display to the public, and it’s done solely to protect their monopoly power,” Montoya said. “The idea that innovation and ways to monetize journalistic content must come only from Google is false, and this is their defense.”
