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Saturday, November 27, 2021

US government’s lawsuit against Google: What it means and more

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Google will hold more than 29 per cent of the U.S. digital advertising market by the end of this year, with Facebook following second with 24 per cent and Amazon third, according to research firm eMarketer. But that’s all digital ads — in search ads only, Google is by far the heavy, holding nearly three-quarters of the market.

This, the DOJ argues, unfairly shuts out any would-be competitors, and can leave advertisers themselves with subpar service and few alternatives.

The lawsuit charges that Google’s “exclusionary” conduct stifles competition in search advertising, thus harming advertisers. By suppressing competition, Google has more power to manipulate the “quantity of ad inventory auction dynamics” — that is, how much advertisers pay for their ads — in ways that allow the company to charge advertisers more than it could in a competitive market, the lawsuit says.

Plus, Google can also offer businesses lower-quality ad services if it wants to, the lawsuit argues — for instance, by restricting the information it provides them on their own marketing campaigns. Without viable competition, who’s to stop it?

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