Antitrust Experts Raise New Concerns about Google’s Digital Advertising Dominance

Former DOJ antitrust economist outlines in new policy paper a potential legal roadmap and evidence of harm to competition and consumers. Omidyar Network calls for the U.S. Department of Justice to accelerate a full investigation of Google’s behavior.

WASHINGTON, DC (May 18, 2020) – Omidyar Network, the social impact organization committed to addressing the most critical economic, technological, and societal issues of our time, today unveiled a groundbreaking roadmap for a possible monopolization case against Google based on the dominant position it built and maintained over critical elements of the digital advertising market.

The “Roadmap for a Digital Advertising Monopolization Case Against Google” was co-authored by Fiona M. Scott Morton, Theodore Nierenberg Professor of Economics at the Yale University School of Management and former deputy assistant attorney general for economics at the U.S. Department of Justice’s antitrust division with David C. Dinielli, a senior advisor at Omidyar Network and former special counsel at the U.S. Department of Justice’s antitrust division.

“Evidence provided by the U.K. authority reveals a great deal about the lack of competition in ad tech and the anticompetitive behavior of Google in recent years. It adds up to a very concerning situation that warrants close scrutiny on this side of the Atlantic Ocean by U.S. antitrust authorities,” said Fiona M. Scott Morton, co-author of the policy paper.

The roadmap is the first in a series by former antitrust officials, economists, lawyers, and ex-regulators that have marshaled compelling evidence of the anticompetitive conduct and harms inflicted on publishers, advertisers and consumers by certain online platforms.

Google’s business approach was instead a persistent strategy to monopolize the entire “ad tech stack” that connects buyers to sellers, according to the experts’ findings. The company has used its presence across the industry to exclude competitors and prevent the entry of new ones, raise rivals’ costs, and force buyers and sellers to rely on Google services for sales. Google further has harmed its rivals who also earn revenue from digital ads, publishers, because they now must use its services to obtain revenue at the same time as competing with Google’s content properties like YouTube.

Using market information gathered by the U.K.’s Competition and Markets Authority (CMA), the roadmap demonstrates how Google has acquired and asserted its dominance by creating significant barriers designed to prevent competitors from entering search and display advertising markets. The experts’ analysis shows how Google’s unequal access to user data, lack of transparency and asymmetric information, acquisitions, and conflicts of interest have created, maintained, and expanded the company’s power in these domains. 

The CMA had found that Google has a virtual monopoly in search advertising as well as:

  • 90% of the publisher ad server market;
  • 40-60% of the exchange market; and
  • 50-70% of the demand side platform market.

Scott Morton and Dinielli’s analysis found that because of this conduct, advertisers, publishers, and consumers have been harmed by increased prices, loss in business value, suppressed innovation, and the diminished quality of content on the Internet. 

“Our paper shows that Google has systematically invaded and occupied every function in the complex digital advertising market in the U.K., and then used its vast power to exclude its rivals and re-write the rules of engagement,” said David C. Dinielli, co-author of the policy paper. “If Google’s dominance and anti-competitive conduct in U.S. markets are anything like its conduct in the U.K. — and there every reason to believe that it is — then this paper should sound the alarm to US regulators that we must rein in Google’s dominance and remedy the harms it has caused to publishers, advertisers, and consumers.”

Google has achieved unprecedented control in every segment of the digital advertising market by acquiring once-independent “ad tech” companies that previously competed to provide the various services required to match digital advertisers with the precise placement destinations where consumers see advertisements, according to the analysis.

“We hope the relevant US federal and state agencies, who are hard at work determining when and where anticompetitive practices and harms have occurred, will find this evidence helpful,” said Anamitra Deb, senior director at Omidyar Network. “We also believe this analysis should help them predict, and ideally prevent, similar conduct in the future.”

The policy paper offers initial insights into what a full investigation by the U.S. Department of Justice antitrust division would uncover and encourages additional analysis into facts and data unavailable to the authors or the public.

Technology has undoubtedly made the way we work, play, and connect easier than ever. It has brought advantages to all of our lives. The services provided by Google and other technology platforms provide extraordinary benefits to consumers and to society, free of charge. The paper explains that these benefits need not be lost; when authorities require companies to behave competitively, consumers tend to see innovation and quality benefits. As the paper concludes, consumers deserve the best these types of services can offer, as do future consumers, who should inherit functioning digital markets, the conditions of which we can change today.

To view the full policy paper, click here.

About Omidyar Network

Omidyar Network seeks to create a more equitable economy, promote responsible technology that improves lives, and discover the emergent issues that will shape our future. Established in 2004 by philanthropists Pam and Pierre Omidyar, the founder of eBay, ON has committed more than $1 billion to innovative for-profit companies and nonprofit organizations to catalyze economic and social change.


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