As the US Department of Justice aims to break up Google's alleged ad tech monopoly, experts say that remedies sought in the antitrust trial could potentially benefit not just advertisers and publishers but also everyone targeted by ads online.
So far, the DOJ has argued that through acquisitions, Google allegedly monopolizes the ad server market, taking a substantial cut of every online ad sale by tying together products on the buyer and seller sides. Locking publishers into using its seller-side platform to access its large advertiser demand, Google also allegedly shut out rivals by pushing advertisers into a corner, then making it hard for publishers to switch platforms.
This scheme also allegedly set Google up to charge higher "monopoly" fees, the DOJ argued, allegedly putting some publishers out of business and raising costs for advertisers.
But while the harms to publishers and advertisers have been outlined at length, there's been less talk about the seemingly major consequences for consumers perhaps harmed by the alleged monopoly. Those harms include higher costs of goods, less privacy, and increasingly lower-quality ads that frequently bombard their screens with products nobody wants.
By overcharging by as much as 5 or 10 percent for online ads, Google allegedly placed a "Google tax" on the price of "everyday goods we buy," Tech Oversight's Sacha Haworth explained during a press briefing Thursday, where experts closely monitoring the trial shared insights.
"When it comes to lowering costs on families," Haworth said, "Google has overcharged advertisers and publishers by nearly $2 billion. That's just over the last four years. That has inflated the price of ads, it's increased the cost of doing business, and, of course, these costs get passed down to us when we buy things online."
But while it's unclear if destroying Google's alleged monopoly would pass on any savings to consumers, Elise Phillips, policy counsel focused on competition and privacy for Public Knowledge, outlined other benefits in the event of a DOJ win.
She suggested that Google's conduct has diminished innovation, which has "negatively" affected "the quality diversity and even relevancy of the advertisements that consumers tend to see."
Were Google's ad tech to be broken up and behavioral remedies sought, more competition might mean that consumers have more control over how their personal data is used in targeted advertising, Phillips suggested, and ultimately, lead to a future where everyone gets fed higher-quality ads.
That could happen if, instead of Google's ad model dominating the Internet, less invasive ad targeting models could become more widely adopted, experts suggested. That could enhance privacy and make online ads less terrible after The New York Times declared a "junk ad epidemic" last year.
The thinking goes that if small businesses and publishers benefited from potentially reduced costs, increased revenues, and more options, consumers might start seeing a wider, higher-quality range of ads online, experts suggested.
Better ad models "are already out there," Open Markets Institute policy analyst Karina Montoya said, such as "conceptual advertising" that uses signals that, unlike Google's targeting, don't rely on "gigantic, massive data sets that collect every single thing that we do in all of our devices and that don't ask for our consent."
But any emerging ad models are seemingly "crushed and flattened by this current dominant business model that's really arising" from Google's tight grip on the ad tech markets that the DOJ is targeting, Montoya said. Those include markets "for publisher ad servers, advertiser ad networks, and the ad exchanges that connect the two," Reuters reported.
At the furthest extreme, loosening Google's grip on the online ad industry could even "revolutionize the Internet," Haworth suggested.
One theory posits that if publishers' revenues increased, consumers would also benefit from more information potentially becoming available on the open web—as less content potentially gets stuck behind paywalls as desperate publishers seek ways to make up for lost ad revenue.
Montoya—who also is a reporter for the Center for Journalism & Liberty, which monitors how media outlets can thrive in today's digital economy—noted that publishers depending on reader funding through subscriptions or donations is not sustainable if society wants to "have an open in free market where everybody can access information that they deserve and have a right to access." By reducing Google's control, the DOJ argues that publishers would be more financially stable, and Montoya hopes the public is starting to understand how that could benefit the open web.
"The trial is really allowing the public to see a full display of Google's pattern of retaliatory behavior, really just to protect its monopoly power," Montoya sad. "This idea that innovation and ways to monetize journalistic content has to come only from Google is wrong and this is really their defense."
Google prepares to defend its ad tech empire
Google has argued that integrating its ad tech products is a feature, not a bug, claiming that it provides a cost-efficient way for publishers and advertisers to connect. The tech company hopes to convince the court that the DOJ's market definition is too narrow and that it faces extensive competition online when you consider all the various types of ads bought and sold across the Internet.
However, as the DOJ wraps its case, ad industry executives told The Drum that they were "cautiously optimistic" that Google would struggle to defend its current business model. Some in the industry even feel hopeful that the competitive landscape will soon change.
Over the past week and a half, the DOJ has brought in former Google employees testifying on how Google's ad tech business was built, publishers testifying on the harms of Google's alleged monopoly, and rivals testifying on how Google's conduct shut them out.
But senior counsel for the American Economic Liberties Project, Lee Hepner, said that "the best evidence in this case is coming from Google's internal documents," where executives baldly suggest acquiring rivals to "park" them or liken Google's control of its ad exchange to gaming the New York Stock Exchange. These internal documents will "complicate" Google's defense, The Drum forecasted.
The DOJ has asked the court to block Google from tying together its products and to order the divestiture "of, at minimum, the Google Ad Manager suite, including both Google’s publisher ad server," DoubleClick For Publishers, and "Google’s ad exchange, AdX, along with any additional structural relief as needed to cure any anti-competitive harm."
Experts at the press briefing suggested behavioral remedies were also needed to ensure that Google stops engaging in allegedly anti-competitive conduct.
Judge rejects some Google witnesses
The DOJ had previously requested a jury trial, but Google sent an unexpected check in May to ensure that the tech company would only face a single judge, seemingly hoping this would help their case.
During the press briefing, experts expressed confidence that US district judge Leonie Brinkema understands the stakes involved after the DOJ presented what experts considered to be a strong but highly technical case against Google.
"This judge in this case has been very deliberate and very technical and very specific and favors brevity and specificity over everything else, and I think she's capable of making her own decision on what's best for this case," Phillips said.
According to Hepner, Brinkema has so far demonstrated an "astute understanding" of the "complex technology" involved. She's frequently interrupted experts to avoid redundant information, Hepner said, and she's even "indicated that she does not expect to allow Google to call" all the witnesses that it wants when raising its defense. Ensuring that the trial moves speedily along, Brinkema has already cut what could have been a six-week trial to possibly four weeks. And limiting Google's witnesses could shorten the trial timeline even more, Hepner suggested.
"I think the pace at which Brinkema is moving through this and cutting testimony is another indicator that she gets it and she's hearing the parties clearly," Hepner said. "Whether that means the government's case is stronger in Brinkema's eyes is anyone's guess, but it's easy to say that it is an indication that the government is presenting a strong and clear case at this point."
Montoya noted that Brinkema's also already asked "pretty deep" questions when weighing potential remedies. That includes asking a DOJ's expert witness to explain what would happen if Google's alleged ad tech monopoly was broken up, given how many people depend on its ad demand.
Brinkema is apparently concerned that "everybody's talking about how important" the ad "demand side is" and "that it's essentially under the control of Google at this point," Montoya said. So, the judge wanted the expert to explain, "what is the alternative scenario?"
According to Montoya, the expert testified that the market would adjust "because technically all of the other market players can also provide the same source of money or even higher"—if not for Google allegedly artificially winning the majority of ad buys.
After the DOJ's arguments conclude, Google will likely take about a week and half to defend against the DOJ's claims. Already, Google has disputed that it's blocked innovation or diminished privacy in the disputed markets, claiming that it's actually protecting users' data by controlling all sides of the ad exchange.
Sarah Kay Wiley, director of policy for CheckMyAds, suggested in the press briefing that Google's security argument is "dangerous" and "just isn't true." And seemingly neither is Google's claim that its ad exchange competes on the merits and is preferred because it's "simple, affordable, and effective," Montoya said, since testimony showed that "advertisers and publishers essentially have nowhere to go at this point" but Google due to the tech giant's seemingly aggressive moves.
Experts agreed with ad industry analysts, predicting that Google will struggle to contradict what Google's former president of display advertising, David Rosenblatt, said in 2009 was Google's true intent in acquiring competitors and building up its ad tech empire: to "end up controlling or managing probably 90 percent of display inventory on the web" in order to "crush" other ad networks.
Google declined Ars' request to comment on its defense beyond linking to a blog outlining key points the tech giant will make in the coming weeks.
