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Feb 9, 2023 10 min read

Google and the "illegal monopolisation" of the digital advertising market

Google and the "illegal monopolisation" of the digital advertising market

Premium 🔐: The US government, via the The US Department of Justice is suing Google, and it’s a big deal! The case against Google is that it unfairly dominates almost every aspect of the digital advertising market.

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Can the DoJ right the wrong of the FTC's 2007 decision?

In 2007, Google bought a digital advertising business called DoubleClick. It was/is the technology solution that inserts adverts into webpages that are individually targeted for the reader. The acquisition caused a lot of concern at the time that DoubleClick would give Google the ability to control both sides of the digital ad market. This was because Google had already established momentum as the number 1 Search engine.

By buying  DoubleClick, Google would have the ability to both know what you were interested in (from your search history) and which ads to serve you (because that’s what DoubleClick did/does.) It was an acquisition that drew the scrutiny of privacy groups, warning of Google’s unparalleled access to data about Internet users, as well as competition regulators, namely the FTC.

The Federal Trade Commission in the USA government agency that oversees competition, mergers and acquisitions. The FTC reviewed Google’s acquisition of DoubleClick and ruled four to one in favour of allowing it to go ahead. The FTC believed that a competitor would emerge to prevent Google from dominating the digital ad market.

In their ruling, the FTC said that the acquisition was  “unlikely to substantially lessen competition.” The one dissenting commissioner, Pamela Jones Harbour, warned that the acquisition would create an “advertising colossus.

"I am convinced that the combination of Google and DoubleClick has the potential to profoundly alter the 21st Century Internet-based economy -- in ways we can imagine, and in ways we cannot,” Pamela Jones Harbour, FTC Commissioner

Read the FTC ruling here.

How right she was, and how wrong the FTC got it. Because, instead of encouraging competition and innovation, the opposite has happened. Over the past fifteen years or so, Google is accused of buying up competing business, railroading the buyers of digital ads to use only its tools, penalising those that don’t, and exploiting it’s dominant position with Search and Android to control up to 90% of the markets Google operate in.

Here’s The Thing: For all it’s huff and puff, the US government has been lacklust when it comes to regulating BigTech. On the fence of a neoliberal, capitalism is king,  let the markets decide, political ideology, both Republicans and Democrats have sat back and watched as BigTech grows, dominates and controls the space they operate in, to the exclusion of innovation, startups and competition.

This time it’s the Department of Justice leading the charge, alleging that Google broke the law, many times. The DoJ appear to be up for the challenge and have set their sights high with the break-up of Google. This is no small task. Google have an army of high paid lawyers at their disposal, many more than the DoJ have on their side.

But, the DoJ has the law. And whereas the FTC decision in 2007 about DoubleClick was based on judgement, the DoJ case rests on their ability to prove Google broke the law. If they succeed in breaking up Google, it could have a profound impact on the Internet as we know and use it today. Because Google is everywhere, for now at least!

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