Only a decade ago, laughing while scrolling past poorly targeted online ads was a regular occurrence for those of us who got our daily news fix online. As a rule, we were skeptical of any company’s ability to read our minds and serve ads we actually cared about. Today, the ads chasing us across platforms are eerily on the nose.
That increase in precision tracks with the meteoric rise of Google’s ad exchange platform and its slow creep into every aspect of the online experience. Google isn’t the only company serving paid content, but it might as well be: Its publisher ad server Google Ad Manager dominates more than 90% of the market and manages its relationships with both customers and competitors with an iron fist.
In retrospect, Google’s 2008 acquisition of competitor DoubleClick should have set off more alarm bells than it did. The DoubleClick sale was more than just a business deal; it was a tee-up for Google’s total market domination. Since then, Google has waged war on competing ad exchanges.
According to a multistate antitrust complaint filed last year by 11 state attorneys general, Google achieved its market dominance through a pattern of exclusionary conduct, which locked up distribution channels and blocked rivals, and a price-fixing agreement with Facebook that maintained its monopoly power. As part of a series of tying arrangements that make the use of Google-owned bidding software mandatory, bids are automatically routed through Google servers, allowing Google to control the process and charge sky-high prices for the privilege of doing business.
You see the problem: Publishers could bail on these expensive and lopsided arrangements, but in doing so, they’d lose access to Google’s huge market share and hurt their businesses. At this point in the game, they can’t afford not to pay a premium.
Google’s monopoly over online advertising has turned the company into a lawsuit magnet, attracting the attention of regulators and state attorneys general already used to rooting out anti-competitive conduct in the oil and gas, telecommunications, and airline industries. Their concern over the way Google does business is reflected overseas in the United Kingdom and the European Union, where regulators have issued hefty billion-dollar fines.
This increase in scrutiny has also emboldened the news publishers the content of which generates millions of dollars in ad revenue for Google free of charge. In the most genuinely stunning example to date, news publishers in Australia called Google’s bluff and won after the tech giant threatened to pull out of the country if the government forced platforms to pay for news content. Facing down an incoming regulatory sledgehammer, Google quickly brokered its own payment deals with publishers.
It’s stunning, but not surprising, considering the uneven terrain the Googles of the world force even major publishers to navigate. Google built a fence around content creators big and small that slowly but surely mutated the business of creating news into the business of generating clickbait.
Still, the conversation on what to do about it generates scandal even among Sherman Act-friendly conservatives. Testimony from Thursday’s Senate judiciary subcommittee hearing on the future of antitrust policy will hopefully move Congress closer to solving the riddle that is competition policy. Many argue that the status quo is the new face of capitalism and that antitrust lawsuits punish businesses for “being too successful.”
Contrary to this hot take, antitrust lawsuits only punish companies that break competition laws, something Google has almost certainly done. Its literal control of the flow of information has fundamentally transformed the news publishing industry and severely limits consumer choice.
For years, Google and other tech giants have hidden behind the complexity of the services they provide, hoping regulators will get lost in the technicalities and give up on their investigations. But the explosion of the tech industry means that the rare genius and expertise that once launched Google is now available for hire. We no longer have any excuse not to enforce the laws already on the books and hold Google and other tech platforms accountable for the fundamental harms they have unleashed on the free market.
Sen. Marsha Blackburn serves on the Senate Judiciary Committee’s Subcommittee on Competition Policy, Antitrust, and Consumer Rights.
