Aurich Lawson
As the U.S. Justice Department seeks to break up Google's alleged monopoly on advertising technology, experts say the actions taken in the antitrust lawsuit could benefit not just advertisers and publishers, but everyone targeted by ads online.
So far, the DOJ has argued that Google, through acquisitions, allegedly monopolizes the ad server market, grabbing a substantial share of every online ad sale by tying together products on the buyer and seller sides. By forcing publishers to use its seller platform to access its large demand from advertisers, Google has also allegedly locked out rivals by cornering advertisers and then making it difficult for publishers to switch platforms.
According to the Justice Department, the plan would also have resulted in Google charging higher “monopoly” fees, which would have driven some publishers out of business and increased costs for advertisers.
But while the harm to publishers and advertisers has been extensively outlined, less has been said about the seemingly vast consequences for consumers who may be harmed by the perceived monopoly. Those harms include higher costs of goods, less privacy, and increasingly poor-quality advertising that regularly bombards their screens with products no one wants.
By charging 5 to 10 percent too much for online advertising, Google would have imposed a “Google tax” on the price of “everyday goods we buy,” Tech Oversight's Sacha Haworth explained at a press conference on Thursday, where experts closely following the trial shared their insights.
“When it comes to lowering costs for families,” Haworth said, “Google has overcharged advertisers and publishers by almost $2 billion. That's just in the last four years. That's inflated the price of advertising, it's increased the cost of doing business, and of course those costs are passed on to us when we buy things online.”
It's unclear whether consumers would benefit from destroying Google's perceived monopoly, but Elise Phillips, a policy adviser specializing in competition and privacy for Public Knowledge, outlined other benefits in the event of a victory at the Justice Department.
She argued that Google's behavior has reduced innovation, which has a “negative” impact on “the diversity, quality, and even relevance of the ads consumers typically see.”
If Google’s ad technology were to be broken up and behaviorally changed, Phillips said, more competition could give consumers more control over how their personal data is used in targeted ads. And that would ultimately lead to a future where everyone sees higher-quality ads.
That could happen if, instead of Google's advertising model dominating the internet, less invasive ad targeting models were more widely adopted, experts have suggested. That could improve privacy and make online ads less awful after The New York Times last year declared a “junk ad epidemic.”
Experts say consumers will see a wider and higher-quality selection of ads online as small businesses and publishers take advantage of potentially lower costs, higher revenues and more options.
According to Karina Montoya, a policy analyst at the Open Markets Institute, there are “better advertising models already,” such as “conceptual ads” that use signals that, unlike Google’s targeting, don’t rely on “giant, massive datasets that collect everything we do on all our devices and don’t ask for our consent.”
But all of the emerging advertising models are seemingly being “crushed and squashed by this current dominant business model that’s really emerging” from Google’s tight grip on the ad tech markets the DOJ is targeting, Montoya said. Those include markets “for publishers’ ad servers, advertisers’ ad networks and the ad exchanges that connect the two,” Reuters reported.
In the extreme, loosening Google's grip on the online advertising industry could even “revolutionize the internet,” Haworth said.
One theory is that if publishers’ revenues were to increase, consumers would also benefit from the increased availability of information on the open web. Less content would remain behind paywalls as publishers desperately search for ways to compensate for the loss of advertising revenue.
Montoya, who is also a reporter for the Center for Journalism & Liberty, which tracks how media outlets can thrive in today's digital economy, noted that publishers that rely on funding from readers through subscriptions or donations is not sustainable if society wants “an open, free marketplace where everyone has access to the information they deserve and are entitled to.” By reducing Google's control, the DOJ argues that publishers would be more financially stable, and Montoya hopes the public will begin to understand how that could benefit the open web.
“The lawsuit really gives the public a full picture of Google’s pattern of retaliatory behavior, really just to protect its monopoly power,” Montoya said sadly. “The idea that innovation and ways to monetize journalistic content should come only from Google is wrong and this is really their defense.”
