Google seen as threat to advertisers, consumers

Report outlines how U.S. could bring antitrust case against internet monolith

Google’s dominance of the $130-billion (U.S.) digital advertising market is harming advertisers, news publishers and consumers, according to a paper that outlines how the U.S. 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 monopolize 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.”

The paper comes out of a research project into technology platforms funded by the Omidyar Network, an organization co-founded by eBay Inc. 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 monopolization case against Google, the report comes as the 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.

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

Washington-based tech policy organization Public Knowledge, which is running the research project funded by Omidyar, shared the paper with the Justice Department and the states. The Justice Department didn’t respond to a request seeking comment.

The paper focuses on the display ads that appear across the web. Google, a unit of Alphabet Inc., owns much of the chain of technology tools that connects advertisers like Procter & Gamble Co. 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 Condé 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 40 cents 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. The report outlines 20 instances of conduct by Google that the authors say support a monopolization case against the company.