How the Google antitrust lawsuit can impact advertisers


Digital advertising could be on the cusp of changing forever.

The antitrust lawsuit against Google is one of the most significant filed by the U.S. Department of Justice (DOJ) in over 25 years.

While there are numerous digital advertising providers, Google still captures approximately 28% of digital ad spend, making it the industry’s predominant player. 

If the DOJ wins the lawsuit, the digital advertising landscape will forever change. 

Understanding the official DOJ lawsuit 

To understand the complaints within the DOJ lawsuit, you need to read the official press statement of the Office of Public Affairs for the U.S. Department of Justice. The official complaints against Google’s anticompetitive conduct include:

  • Acquiring competitors: Engaging in a pattern of acquisitions to obtain control over key digital advertising tools used by website publishers to sell advertising space.
  • Forcing adoption of Google’s tools: Locking in website publishers to its newly-acquired tools by restricting its unique, must-have advertiser demand to its ad exchange, and in turn, conditioning effective real-time access to its ad exchange on the use of its publisher ad serve.
  • Distorting auction competition: Limiting real-time bidding on publisher inventory to its ad exchange, and impeding rival ad exchanges’ ability to compete on the same terms as Google’s ad exchange.
  • Auction manipulation: Manipulating auction mechanics across several of its products to insulate Google from competition, deprive rivals of scale, and halt the rise of rival technologies.

Keep in mind that this isn’t the only lawsuit Google faces. Three antitrust suits have been launched against Google since 2020. 

In November 2020, the DOJ launched its first antitrust lawsuit against Google. In this public filing, the DOJ lodged these complaints against Google: 

  • Entering into exclusivity agreements that forbid preinstallation of any competing search service.
  • Entering into tying and other arrangements that force preinstallation of its search applications in prime locations on mobile devices and make them undeletable, regardless of consumer preference.
  • Entering into long-term agreements with Apple that require Google to be the default – and de facto exclusive – general search engine on Apple’s popular Safari browser and other Apple search tools.
  • Generally using monopoly profits to buy preferential treatment for its search engine on devices, web browsers, and other search access points, creating a continuous and self-reinforcing cycle of monopolization.

Get the daily newsletter search marketers rely on.


Recent revelations from the antitrust proceedings 

Over the past few weeks, startling revelations have been revealed about how Google manipulates auction prices. Search Engine Land’s Nicola Agius reported: 

  • “The search engine ‘frequently’ changes the auctions it uses to sell search ads, increasing the cost of ads and reserve pricing by as much as 5% for the average advertiser.” 

If Google can raise ad prices without competition, it can support the Justice Department’s claim that they have an unlawful monopoly.

While free for users, the department can argue that increased competition could have addressed other issues in the search industry, like privacy standards.

These accusations have significantly impacted advertiser trust in Google. Google has damaged its trust and credibility by prioritizing quarterly targets over the success of businesses on its platform. 

The unfair manipulation of actions harms the businesses that rely on its platform and earn money at their expense.

The antitrust lawsuits against Google are still pending. The legal proceedings could have numerous potential outcomes. 

It’s almost impossible to predict what will happen between Google and DOJ. But we can look to history for a precedent set by other antitrust lawsuits against tech companies. The first that comes to mind is the lawsuit against Microsoft in 1998. 

In 1998, the Department of Justice lawsuit accused Microsoft of dominating the personal computer market and unlawfully blocking a rival browser, Netscape Navigator.

The court found Microsoft guilty, and a settlement was reached that allowed the company to continue operations. And Google Chrome would eventually dominate the browser market. 

Potential outcomes of the lawsuit

As I said, predicting what will happen with these lawsuits is impossible. But, we can discuss the potential consequences for Google’s core business. 

Google wins

If Google wins the numerous DOJ lawsuits, its business should remain relatively unchanged. The DOJ is circling Google with multiple accusations, and it’s possible that even if Google wins this round, the DOJ could file other lawsuits. 

Google loses

The complaints lodged in the DOJ lawsuits are extensive and wide-reaching. The DOJ could be casting an aggressively wide net, knowing it will likely have to settle with Google’s army of attorneys. 

If Google loses, there are degrees of potential impact on its business. Let’s breakdown those impacts into rank order:

  • Break up the entire Google ad stack business: If Google loses terribly, the most significant outcome would be the DOJ breaking up Google. This is an unlikely outcome.
  • Segment DV360 and Display network: Google’s dominance in the digital ad market is indisputable. The DOJ could break up Google’s monopoly by breaking out DV360 and the Display Ads network.
  • Extract YouTube from Google: YouTube is a significant factor in Google’s advertising business. The DOJ could extract YouTube and/or display ads from Google’s core business. The objective would be to leave Google more search-focused. 
  • Gut Google’s tech stack: Google provides inventory and the buy-side of delivering digital ads. The DOJ could break this up by forcing Google to sell its Google Marketing Platform (GMP). This is unlikely, but it would break up the supply and demand side issue. 
  • Apply fees and regulations: The lightest outcome if Google should lose one or more lawsuits would be fines and regulations. The DOJ could impose rules that Google products are not the default on devices from other companies like Apple. This would impact Google’s financials and growth, but it would leave the company intact. 

What about advertisers?

Below are ways the antitrust lawsuit could impact Google Ads advertisers.

  • Channel access and management: Advertisers have access to numerous advertising channels via Google. If the DOJ has its way, advertisers may have to access this ad inventory through varying providers. You could have one platform for YouTube, another for Google display inventory and Google Ads for search marketing. 
  • Blended campaign uncoupling: Along with multiple platforms to access inventory, Google’s automated blended campaigns would no longer exist. These products include Performance Max, Demand Gen, Video Views, and Video Reach campaigns. The channels blended into these products are Search, YouTube, Display, Gmail, Shopping, and Discovery – and those could reside in segmented businesses. 
  • Data-driven attribution disruption: Measurement and attribution continue to be impacted by privacy policy and device software, most notably Apple. However, Google will suffer complete signal loss across channels if not connected on the backend through Google servers. 

Bracing for impact amid Google’s legal battles

The DOJ’s antitrust lawsuit against Google represents a pivotal moment in digital advertising.

The potential outcomes are wide-ranging, and while it’s impossible to predict the exact path this legal battle will take, one thing is certain: advertisers need to be prepared for change.

History shows that the DOJ will have to fight an uphill battle to get a clear victory over Google.

However, if the DOJ wins any of these lawsuits, the digital advertising landscape will forever change for advertisers and global users. 

Opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.



Source link : Searchengineland.com

Social media & sharing icons powered by UltimatelySocial
error

Enjoy Our Website? Please share :) Thank you!