Google in the spotlight
Google has had a challenging couple of weeks. New research on its complex advertising model and a high-profile controversy involving the threat of demonetizing a popular conservative website in the United States have put the company on the defensive. This newest episode of “Big Tech behaving badly” may presage forthcoming legal and policy changes to how we treat global technology giants.
Let’s start with the controversy involving the Federalist, a right- wing online magazine with a populist streak. The website’s articles tend to be provocative and controversial. It’s certainly not for everyone. But in the polarized extremes of internet commentary, its content is relatively conventional. Think Fox News rather than Infowars.
Yet last week, the Federalist drew attention from Google for user- generated comments on its site that the online giant characterized as “derogatory.” Google told the web- based magazine to remove the content or face the prospect of being prevented from receiving revenues from its online ads.
Although we don’t know the particular comments in question, it’s not necessarily indefensible that Google intervened, at least in principle. The role of technology platforms in monitoring and policing online content is the subject of an evolving and legitimate public debate. Some experts have rightly observed, for instance, that, as a private company, Google doesn’t have to provide advertising services to anyone.
But the obvious double standard here is indefensible. There’s plenty of offensive content online. Yet we still don’t have an explanation for why Google opted to single out the Federalist.
It’s even more patently absurd given that Google has itself made excuses about its ability to effectively monitor comments and content on Youtube, which it owns. The company has a dubious record of automatically deleting user comments that are critical of the Chinese Communist Party on one hand, and overlooking conspiracy theories, misogyny, racism and other forms of extremism on the other. Republican Sen. Josh Hawley, who has emerged as the leading conservative critic of Big Tech, has called Google’s duplicity on these issues “profoundly disingenuous.”
It seems the United States Department of Justice agrees. It recently released a 25-page proposal that would curb protections that technology platforms have had since 1996 for content posted on their sites by third parties. These protections — afforded by Section 230 of the Communications Decency Act — also give technology companies the freedom to remove “objectionable” content at their discretion.
Sen. Hawley is not only calling for them to be held liable for hosting content that they know is against the law, he’s also seeking to limit the arbitrary removal of objectionable yet legal content, including by permitting users to sue. It’s still too early to know whether there’s sufficient support in Congress to amend Section 230, but one gets the sense that the political ground is shifting.
Yet this isn’t Google’s only political challenge on the horizon. A new academic paper (which is forthcoming in the Stanford Technology Law Review) also raises serious concerns about the company’s advertising business model.
The paper provides a highly technical analysis of Google’s behaviour in “advertising exchanges,” where advertising space is bought and sold electronically through centralized trading venues at high speeds using advanced algorithms. Think about your own online experience. When you go to a website and load a page, in the milliseconds that it takes for the page to load, there are real- time auctions running in the background that determine which ads to load based on your personal data. More than 85 per cent of online display advertising space ( such as banner ads) in the United States are now traded this way.
The main issue that the author, Dina Srinivasan, an antitrust expert affiliated with Yale University, identifies is Google’s multi-faceted role in digital advertising markets. The company’s position as the leading trading venue, the leading intermediary between buyers and sellers and the largest seller of advertising space globally, grants it unique abilities to steer buys and sell advertising to its own websites. It’s notable, for instance, that the evidence shows that Google’s
the obvious double standard here is indefensible.
intermediary services are overwhelmingly pushing advertising dollars to Google’s properties such as Google Search and Gmail.
Google’s three- sided role in digital advertising markets would be like if the Toronto Stock Exchange also owned the largest electronic trading platform and was itself one of the largest market participants selling its own wares. It’s no surprise therefore that the company has been able to amass a major share of the digital advertising market and squeeze out competitors, including news publishers.
What ’ s i nteresting , though, is Srinivasan argues Google’s practices (including superior information sharing between its exchange and its intermediary services) would be prohibited in other electronic trading markets, such as in equities and on stock exchanges. She thinks the solution lies in treating digital advertising exchanges similar to how we regulate real-time trading in the securities market. In particular, she proposes policy reforms to improve transparency, minimize conflicts of interest and enable greater competition in the world of digital advertising.
It’s becoming increasingly clear that policy- makers need to think critically about the place of large technology firms in our societies and the role for public policy to better regulate their activities and practices in the public interest. These are complicated and technical questions for which there are no simple answers. But the case of the Federalist and Srinivasan’s new research reinforce that we can no longer avoid asking them.