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digital advertising
EU Praised for Urging Google Breakup Over Online Ad Market Domination
"Antitrust enforcers worldwide agree: We must break up Google’s advertising monopoly," said one expert. "As the commission said in its statement, it is the only way to stop Google's anti-competitive behavior."
Jun 14, 2023
The European Commission won praise from anti-monopoly campaigners and experts around the world on Wednesday by declaring that Google's dominance of online advertising violates competition rules and should be resolved with forced divestment.
The commission—an executive arm of the European Union—detailed the preliminary findings of its probe in a statement of objections on Google's practices in advertising technology, or ad tech. The company operates two ad buying tools, Google Ads and DV 360; a publisher ad server, DoubleClick for Publishers (DFP); and an ad exchange, AdX.
"Google has a very strong market position in the online advertising technology sector," said Margrethe Vestager, the commission's executive vice-president in charge of competition policy. "It collects users' data, it sells advertising space, and it acts as an online advertising intermediary. So Google is present at almost all levels of the so-called ad tech supply chain."
"Our preliminary concern is that Google may have used its market position to favor its own intermediation services," Vestager explained. "Not only did this possibly harm Google's competitors but also publishers' interests, while also increasing advertisers' costs. If confirmed, Google's practices would be illegal under our competition rules."
"The commission understands that Google's position as a buyer, broker, and owner of a digital advertising exchange poses pervasive conflicts of interest."
Specifically, the commission found that since at least 2014, Google has "abused its dominant positions" by "favoring its own ad exchange AdX in the ad selection auction run by its dominant publisher ad server DFP by, for example, informing AdX in advance of the value of the best bid from competitors which it had to beat to win the auction."
The company has also violated E.U. rules by "favoring its ad exchange AdX in the way its ad buying tools Google Ads and DV360 place bids on ad exchanges," the commission said. "For example, Google Ads was avoiding competing ad exchanges and mainly placing bids on AdX, thus making it the most attractive ad exchange."
"In this particular case, a behavioral remedy is likely to be ineffective to prevent the risk that Google continues such self-preferencing conducts or engages in new ones," the statement of objections says. "The commission's preliminary view is therefore that only the mandatory divestment by Google of part of its services would address its competition concerns."
\u201cThe @EU_Commission shows readiness to break up Google\u2019s ad business: good news for consumers. Read our reaction \ud83d\udcf0: https://t.co/lPfN3BWY0j\u201d— The Consumer Voice (@The Consumer Voice) 1686741649
The commission also stressed that sending a statement of objections "does not prejudge the outcome of the investigations." Google can now respond in writing and request an oral hearing before representatives of the commission and national competition authorities—and Dan Taylor, the company's vice president of global ads, signaled Wednesday that it plans to do so.
"Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers. Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector," Taylor said. "The commission's investigation focuses on a narrow aspect of our advertising business and is not new. We disagree with the EC's view and we will respond accordingly."
Meanwhile, others applauded the commission's move and highlighted that it aligns with a lawsuit the U.S. Department of Justice and eight states filed against Google in January as well as an ongoing antitrust investigation in the United Kingdom.
"Antitrust enforcers worldwide agree: We must break up Google's advertising monopoly," said Katherine Van Dyck, senior counsel at the American Economic Liberties Project, in a statement. "Like the Department of Justice and a coalition of U.S. state attorneys general, the commission understands that Google's position as a buyer, broker, and owner of a digital advertising exchange poses pervasive conflicts of interest."
"They have also determined that Google regularly abuses its dominant position, undermining smaller businesses, the news ecosystem, and, in fact, the entire digital market," Van Dyck continued. "A breakup is long overdue and, as the commission said in its statement, it is the only way to stop Google's anti-competitive behavior."
\u201cBelieve what you're seeing - Brussels actually wants to break up a Big Tech platform. \n\nAfter years of trying to rein in dominant platforms through futile behavioural remedies, Vestager and the Commission have finally realised that sometimes, structural is the only way to go.\u201d— Max von Thun (@Max von Thun) 1686744146
Open Markets Institute Europe similarly commended the commission "for its intention to break up Google's online advertising monopoly," saying in a statement that "the evidence is overwhelming that Google has used its dominance across the ad tech supply chain to favor its own platforms," and divestment is "the only way to address this egregious conflict of interest."
"After years of trying to unsuccessfully rein in Big Tech—especially Google—through ineffective fines and behavioral remedies, we welcome the commission's newfound willingness to use structural measures to tackle the platforms' dominance. Today's announcement is also a clear illustration of the power competition authorities have when they work in parallel," Open Markets said, pointing to the related actions in the U.S. and U.K.
"This isn't just about economics—Google's monopoly over online advertising poses a fundamental threat to the health of our free media and ultimately, the resilience and integrity of our democracies," the group added. "The bullying tactics deployed by Google and Facebook in Australia, Canada, California, and other jurisdictions when asked to pay for valuable news content are clear evidence of this threat. Regulators around the world must move quickly to rein in these unaccountable giants and rebuild a truly open digital economy."
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DOJ Suit Against Google Heralded as Among 'Most Important Antitrust Cases' in US History
"Never before has a single private institution concentrated so much power and control over so many corners of our nation's political economy," said one anti-monopoly expert.
Jan 24, 2023
Anti-monopoly advocates on Tuesday praised the Biden administration and eight states for launching a federal antitrust lawsuit that could break up Google, which is accused of illegally dominating the digital advertising market.
"Competition in the ad tech space is broken, for reasons that were neither accidental nor inevitable," states the complaint filed by the U.S. Department of Justice (DOJ), California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia in the U.S. District Court for the Eastern District of Virginia.
"We're thrilled to see the Department of Justice finally demand a breakup of Google's advertising monopoly."
"One industry behemoth, Google, has corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising," the complaint continues.
"Having inserted itself into all aspects of the digital advertising marketplace, Google has used anti-competitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies," the document adds, urging the court to force the Alphabet-owned company to sell off its ad tech products.
Echoing the complaint, Demand Progress executive director David Segal pointed out that "Google's monopoly in the advertising technology market functionally forces publishers and advertisers to use its services."
"We're glad to see the Department of Justice demand a breakup of this tech giant, directly taking on its unfair, anti-competitive practices," he said. "This move is critical to protect our democracy, increase innovation, and strengthen small businesses."
\u201c\ud83d\udea8NEW: @JusticeATR is holding @Google accountable for illegally monopolizing the market for online ads. \n\nWe applaud the DOJ for pushing a pro-competition agenda that actually enforces laws on the books and protects the general public from Big Tech.\nhttps://t.co/2syPzCm3wp\u201d— The Tech Oversight Project (@The Tech Oversight Project) 1674585403
American Economic Liberties Project director of research Matt Stoller also welcomed the suit, declaring that "we're thrilled to see the Department of Justice finally demand a breakup of Google's advertising monopoly."
"As the Justice Department's suit meticulously documents, Google is a buyer, broker, and digital advertising exchange with pervasive conflicts of interest," Stoller said. "Google regularly abuses this power, manipulating markets, muscling out any form of competition, and inspiring fear across the commercial landscape."
"The DOJ's suit, which comes alongside a similar suit from a coalition of state attorneys general and efforts in Congress to bring fairness to digital ad markets, shows clearly that Google's days of unbridled dominance are numbered," he asserted.
Bloombergnoted Tuesday that "state attorneys general have filed three separate suits against Google, alleging it dominates the markets for online search, advertising technology, and apps on the Android mobile platform in violation of antitrust laws."
This is the DOJ's first case against the tech giant under President Joe Biden but follows another filed just months before he took office. In response to the new filing, a Google spokesperson said that "today's lawsuit from the DOJ attempts to pick winners and losers in the highly competitive advertising technology sector. It largely duplicates an unfounded lawsuit by the Texas attorney general, much of which was recently dismissed by a federal court. DOJ is doubling down on a flawed argument that would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow."
\u201cJUST IN: AG Merrick Garland announced the Justice Department, along with 8 states, filed a civil antitrust lawsuit against Google. \n\n\u2018Google has used anticompetitive, exclusionary, & unlawful conduct to eliminate or severely diminish any threat to its [digital ad] dominance.'\u201d— NowThis (@NowThis) 1674587389
Meanwhile, Open Markets Institute executive director Barry Lynn argued that "today's lawsuit by the Department of Justice against Google for the monopolization of advertising will be remembered as one of the most important antitrust cases in American history. No previous corporation has ever posed such a direct threat to U.S. democracy, or to individual freedom of expression, action, and thought."
Along with heaping praise on the DOJ's Antitrust Division, Lynn highlighted the impacts of Google's dominance:
The breadth and scope of Google's threat to the American way of life is astounding. Never before has a single private institution concentrated so much power and control over so many corners of our nation's political economy. But the most dangerous threat of all is Google's theft of advertising dollars through large-scale and pervasive surveillance that, since before the Revolution, have ensured the independence and economic health of America's free press. The cost has been enormous. Tens of thousands of journalism jobs destroyed. Thousands of newspapers and other news outlets bankrupted. Every publisher, no matter how big, made fearful of speaking out.
Stacy Mitchell, co-director of the Institute for Local Self-Reliance, stressed that "by picking the pocket of small businesses, small newspapers, and other publishers, Google actively extracts resources from communities that need them most and threatens a free, local press that lies at the heart of our democracy,"
"After decades in which enforcers looked the other way as the tech giants amassed market power, this lawsuit is yet another sign that our antitrust enforcers are again embracing their responsibility to safeguard American liberty and democracy by breaking up monopolies like Google," she said. "We applaud the Justice Department's action today."
U.S. Attorney General Merrick Garland, who joined other DOJ leaders for a Tuesday press conference about the case, pledged that "no matter the industry and no matter the company, the Justice Department will vigorously enforce our antitrust laws to protect consumers, safeguard competition, and ensure economic fairness and opportunity for all."
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