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DOJ claims Google has "trifecta of monopolies" on Day 1 of ad tech trial

255 points| Bender | 1 year ago |arstechnica.com

215 comments

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[+] imiric|1 year ago|reply
It's pretty wild that the case against an adtech giant is based on its monopolistic practices and the harms it is having on publishers, rather than its privacy violations and harms to the general public and to society at large.

They do mention one negative societal effect in passing:

> “The result is less news where it is needed most,” Gannett’s lawsuit said. “Communities throughout the United States now do not have a suitable local paper to advise on local events."

Their issue is that there are not enough newspapers(!), which as we all know are the primary source of modern information... Not that the advertising business has corrupted every form of media it touches, to the point where news outlets don't even report events that don't get them views. Advertising has been instrumental in killing journalism as we knew it, and we're all letting it continue to wreak havoc to our other institutions, because, hey... profit.

> Google has accused the DOJ of having a "narrow view of the ad tech market" that's outdated and "doesn’t reflect reality."

Hilarious take, considering adtech has consistently kept the ways it conducts its business hidden from public view. When users of their services are kept in the dark when their data is being collected and how value is extracted from it, is it really surprising that governments have a wildly inaccurate sense of what's going on? "Senator, we run ads."

[+] HWR_14|1 year ago|reply
The harms to publishers are more quantifiable than privacy violations, so it should be an easier case. Anti-trust lawsuits are about damage to the economy, not just negative outcomes.
[+] davedx|1 year ago|reply
What’s wild about it? This case is about its competitive practices in the marketplace, not privacy
[+] bryanrasmussen|1 year ago|reply
>Advertising has been instrumental in killing journalism as we knew it,

Advertising for many years was what supported journalism. Now there's a problem that advertising doesn't care to support journalism because their industry believes there are superior methods.

[+] xp84|1 year ago|reply
> monopolistic practices and the harms it is having on publishers, rather than its privacy violations and harms to the general public

1. We have a few modest protections in law against monopolistic practices that address its harm to businesses, such as those used to slap MS on the wrist for bundling MSIE as a tactic to kill its competitors, and such as the laws used to force a breakup of AT&T (during times of far more ambitious government regulators). We have a very few absolute jokes of federal and state privacy laws, mostly focused on the complete wrong things.

- CAN-SPAM? Let's demand that you have a physical address on your emails, and that you provide an opt-out link, but all political email is exempt, iirc? and feel free to sell your list to the next guy.

- CCPA? Let's focus on cookies and maybe on how people get annoyed by retargeting ads, and do other stupidity to emulate GDPR but not do anything that changes the actual landscape like maybe mandating an ad-free experience of social networks be offered for money, allowing you to be a customer and not a product.

- Do-not-call list: Let's not force telcos to know where calls originate and allow filtering of spoofed VOIP calls coming from offshore. Or at least, let's let them take 2 decades to fumble around attempting that. Instead let's allow a tiny fine -- and let's exempt the biggest offenders: Political robocalls.

> "and to society at large"

2. Our legal (and political) system really has virtually zero ways of addressing even severe harms to society, whether it's school shootings, thinly-veiled bribery of public officials via 'campaign finance,' or a pervasive corporate culture of extortion, exploitation and cheating that companies like Google and Apple love to engage in.

It seems to me like the DOJ is playing the hand it's dealt -- there's little they can do, but this is something.

[+] waveBidder|1 year ago|reply
privacy isn't really a market power problem though, because you can have a market in such data. We need comprehensive laws protecting privacy before an agency can enforce them.
[+] karmakaze|1 year ago|reply
I don't find it at all wild. Trials determining monopolies are about fair and healthy competition which is good for consumers. If adtech is simply bad for all consumers, that would be a different effort to outlaw it.
[+] nonrandomstring|1 year ago|reply
Monopoly is defined differently in the US and Europe. In Europe a monopoly is permitted so long as the ability to exert dominance in one area does not allow gaining dominance in another. In the US a monopoly is disallowed if it leads to an inefficient market that makes customers pay more.

Imho both are unworkable and useless definitions for different reasons. But, since this is a US trial, it must be shown that Google make customers pay more for goods and services than they could under fair market conditions.

The problem is that Google (and most of its competitors) offer services "for free". As we know, it's not "free", but customers pay with data taken as payment in lieu.

This means the justice system must redefine "free" to incorporate the market price of that data. This is the real cost the customer is paying.

Nobody wants to do that, because nobody (including government) wants an overt acknowledgement of the economics of surveillance capitalism and the entire modern surveillance industry. It is an entire economy set up in parallel to the visible monetary one.

So the proceedings are being cast in all kinds of unusual distortions to avoid this happening.

[+] euroderf|1 year ago|reply
> It's pretty wild that the case against an adtech giant is based on its monopolistic practices and the harms it is having on publishers, rather than its privacy violations and harms to the general public and to society at large.

But then again, "The business of America is business."

[+] otabdeveloper4|1 year ago|reply
That's because the privacy violations are driven by government and deep state interests.

Advertisers don't need or want the personal data. They're just taking the blame for it because knowing the truth is not comfortable for the public.

[+] jordigh|1 year ago|reply
> On Sunday, Google posted a blog warning that any attempt to break up its ad business could rattle customers who choose to use Google's ad tech because it "is simple, affordable, and effective."

Has that ever been true? Every instance I know of monopolies being broken up has been good for customers.

[+] paulgerhardt|1 year ago|reply
It’s a spectrum not a binary.

1970’s Airline breakups were very beneficial to customers with lower prices and more routes popping up virtually overnight (though read “Hard Landing” if you want a more nuanced take), 1980’s AT&T breakup was somewhat beneficial in that long distance and cell rates went down but local rates went up (see “The Deal of the Century”), 1990’s California Energy breakups were basically a net negative for customers allowing energy market speculation and manipulation (“Smartest Guys in the Room”), and in a handful of examples like the Soviet Union or South Africa, deregulation lead to outright collapse of essential sectors in banking, agriculture, and energy and set society/customers back decades (“Sale of the Century”/“After the Party”).

[+] troupo|1 year ago|reply
> Every instance I know of monopolies being broken up has been good for customers.

Sometimes breaking government monopolies may lead to worse outcomes. In Europe breaking transportation monopolies (especially rail transport) lead to decades-long worsening of services in some countries. Because instead of one company managing everything you now have one company owning moving stock, one company owning rails, one company offering repair services, one company... And all of them delegating and re-assigning blame.

But these situations are more of an exception

[+] benoau|1 year ago|reply
One time Google accidentally forgot to refund $70 million they thought they had refunded for ad fraud, and they only found out when they were sued for a $500k piece of it someone definitely knew they had not received. This was back when they were in the tres commas club so I'm sure consumers will benefit immensely from smaller companies with smaller responsibilities.

In a way it's like having a single one-million-line file vs a clean separation between API, UI, etc etc.

https://www.theregister.com/2017/12/13/google_click_fraud_la... (I think it was this one but search results are saturated with other litigation and antitrust since)

[+] Spivak|1 year ago|reply
The best-faith argument I can make of it is that Google/Meta really are the lifeline for a lot of businesses who have zero chance of being able to leverage large-scale advertising blasts that big companies use. The customers using mega-scale digital ad exchanges get the benefit of being able to buy 0.001% of a billboard the moment someone actually interested in their product walks past.

If you want to increase competition and stop the market from consolidating into a few players it's not immediately obvious that breaking up these ad exchanges goes that direction because it deprives reach from everyone except already large companies.

[+] lucumo|1 year ago|reply
> because it "is simple, affordable, and effective."

Hahaha. Maybe if you compare it to getting a master's in marketing...

I'm a user of parts of their ad tech, and I've tried to be a user of more of their ad tech.

It may be affordable. I don't know, because there's not much left to compare it with.

It's probably somewhat effective for loads of people, since it's everywhere.

But it's decidedly NOT "simple". It's a monstrosity. If you come from no ad skills you will have to spend days digging through overly verbose documentation just to figure out which boxes to check. And probably a few hundred to a few thousand to "experiment" and find what's working.

This is absolutely NOT a "spend hundred bucks, get a few interested visitors" solution.

Even at the other end it's getting more complicated. It used to be: here's some HTML, slap it where you want the ad. Now you have to be constantly vigilant that they aren't destroying your site by sneakily enabling Auto Ads or showing interstitials.

When I started this back in '08, there were many of those providers. We could rotate through them to get some variety and get good payouts. ALL of them are now out of business, except Google, who started to magically payout less after competition declined.

As someone who uses them a lot, appreciates their technical ecosystem, who has his bills paid in part by their ad ecosystem, who is generally pro-business and thinks it's fundamentally unfair to punish successful companies for their success, I'll say this: Fuck Google. Break 'm up.

[+] tomjen3|1 year ago|reply
Depends on how you slice it. Without Googles ad money, Firefox will probably die.

Without Googles ad money, so will Chrome - and then consumers are left with what exactly? Safari for those on Apple devices, sure, but thats about it.

If Android is made to stand up on its own, can it? And even if it does, is it competitive with iOS? And for how long? If each major manufactor ends up forking it, even that is a net loss for consumers.

You can split up ma bell, large airlines, and Standard Oil. But a modern high tech business? That is a lot harder.

[+] ApolloFortyNine|1 year ago|reply
You can only install apps on 50+% of phones in America that are approved by Apple, and they also have to grant 30% of all revenue to Apple for the privilege. Including subscriptions or even digital stores (ebooks).

Imo going after for Google for antitrust is like cracking down on jwalking and ignoring the murders taking place downtown.

[+] dagmx|1 year ago|reply
Google have already been found guilty of using their position to undermine competition against their play store. It was a pretty smoking gun at that so it’s pretty fair to use that to follow other abuses of power.

And besides, apple are already under investigation by the DOJ anyway.

[+] left-struck|1 year ago|reply
> Imo going after for Google for antitrust is like cracking down on jwalking and ignoring the murders taking place downtown

That’s an awful analogy. Google is clearly a monopoly on many fronts. Sure, apple aren’t great either but you have to start somewhere, and this is clearly not like going after petty crimes compared to murder.

[+] tsimionescu|1 year ago|reply
Google activates in more than one market. While they are second fiddle in the US mobile space, they are by far the biggest company in the world in ads, web search, web browsing, dwarfing Apple by 100:1 or more in those spaces.
[+] jamil7|1 year ago|reply
Apple being worse doesn’t make Google better.
[+] NemoNobody|1 year ago|reply
Yeah, but Apple didn't start with a "Do no evil" slogan - Google both identified what it means to be evil in its industry and then became it.

I think punishment is in order for something like that.

[+] bpodgursky|1 year ago|reply
Almost nobody outside adtech understands that 3rd party cookies are only alive today because Google was afraid that removing them would give the DoJ additional antitrust ammunition.

Google would gladly have removed them and acted as a broker for anonymized targeting data, but it would have killed other players in the ad ecosystem and given them exclusive power as the distributer of chrome.

[+] asdasdsddd|1 year ago|reply
> the DOJ hopes to prove that Google's alleged monopoly has shuttered newspapers across the US and threatens to do more harm if left unchecked

What does this mean lol. Isn't the real reason that newpapers a shuttering because no one reads newspapers.

[+] jeffbee|1 year ago|reply
Craigslist killed the newspapers. They were abusive local monopolies who charged $50 to run a used car advertisement and Craig Newmark nuked them.
[+] yathaid|1 year ago|reply
From the article:

>> On Monday, Wood told Brinkema that Google intentionally put itself in this position to "manipulate the rules of ad auctions to its own benefit," The Washington Post reported.

A better way to understand this is that Google allegedly forced publishers to use Google's ad server and ad exchange if they wanted traffic from Google ads. From [1]:

>> After buying DoubleClick, Google tied its control over advertising demand to publisher use of its software. As the DOJ put it in the complaint, "If publishers wanted access to exclusive Google Ads’ advertising demand, they had to use Google’s publisher ad server (DFP) and ad exchange (AdX), rather than equivalent tools offered by Google’s rivals." The result is that it acquired a monopoly across the entire industry, in the software publishers use and the matching engine for advertisers.

[1] - https://www.thebignewsletter.com/p/a-post-google-world

[+] accurrent|1 year ago|reply
The way this case is being handled all I see is the courts are trying to make other business people richer. They remain hostile to the consumer. Its a case of legal protection for the rich. I feel the harms that traditional publishers cause are immense as well. They dont pay their employees properly, are controlled by sketchy media moguls. Quite frankly traditional publishing houses just failed to adapt with the times.
[+] gerash|1 year ago|reply
Internet killed local newspapers. They lost the geographic monopolies
[+] braiamp|1 year ago|reply
Newspapers get monetized via ads. Google search being the prime entry point was "preventing" clicks by summarizing articles. Also, Adsense being the biggest kid in the block could set prices due their position as a king maker.
[+] jmyeet|1 year ago|reply
So the DOJ complaint alleges that Google's "monopoly" reduces publisher earnings and increases how much advertisers pay and that's where the alleged 30%+ margin Google gets comes from.

If this is true, 2 of the 3 parties here are motivated to bypass Google to increase the money publishers earn and how much advertisers play, are they not? If's not that hard to set up an ad server from scratch. The issue of course is inventory.

But publishers and use multiple ad servers. In fact there are tools for them to pick whichever impression will pay them the most from those available. Advertisers are free to buy on multiple platforms. At least I see no allegation that Google is actually or effectively restricting the use of other tools.

So can't Google use this to say that publishers use them because they pay the most? And advertisers use them because the ads are the most effective? Advertisers in particularly are heavily metrics-focused. In the background, they're analyzing ad performance (in terms of impressions -> clicks -> action) based on audience segmentation.

Now the DoubleClick cookie does have value because it's so widely deployed, Google has a lot of information to derive behavioural characteristics about the user. Just based on what sites you go to, Google builds a profile of your interests, your likely (implied) demographics and so on. You can argue that this cookie is anticompetitive.

But I don't see "cookie" mentioned once in this article.

So I'm really not sure where this goes. It could be the reporting just isn't great on the case because it requires some legal knowledge. I guess we'll see.

[+] odyssey7|1 year ago|reply
Google broke its reputation as the ideal employer and now it’s in an antitrust trial. I have to wonder whether the two are related.
[+] bbor|1 year ago|reply

  "by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising."
IMO this is, by far, the most slam-dunk case against google, and the slow discovery of that fact is part of the reason I broke down while working there. This article is good, but just to make a complex issue a bit clearer:

There are people who sell Display Ad space ("Publishers") and people who buy ad space ("Advertisers"). Google AdSense is a well-known name, but that's actually their division for small blogs and such -- the big bucks come in from news sites, homepages, and other high-traffic publishers that use a different product altogether. Google isn't a monopoly on the publisher side (say, ads on your "Google Home" screen in the Google app), and obviously isn't a monopoly on the advertiser side; the issue comes about in the middle of the two, the "Ad Exchange" side. Google runs the show, and has spent roughly infinity dollars to keep it that way, even though this whole segment (Display Ads) is a pretty small slice of their overall revenue. The graphic published by the DoJ does the best job of explaining the overall issue, and the pieces involved: https://www.justice.gov/opa/pr/justice-department-sues-googl...

For example, they staved off Facebook's short-lived attempt to break into the exchange market (a meta-market, if you will!) by drowning the issue in money, then eventually doing the corporation equivalent of "I'll pay you $5 to fuck off": cartel formation. https://en.wikipedia.org/wiki/Jedi_Blue

  According to the draft lawsuit, Facebook agreed to reduce its participation in header bidding in return for "information, speed, and other advantages" that would come from staying with Google. Facebook allegedly would receive a guarantee of 90% of auctions regardless of the bids; 300 ms to bid (vs 160 offered to others), along with the ability to identify 80% of smartphone users and 60% of web users.
But IMO by far the most egregious behavior was that time they made a cool $230M off "project Bernanke", so-named because it was deemed a "bailout" of Google's struggling Advertiser clients by favoring them in the Exchange auctions. Somehow said with a straight face! The absolute fucking brazenness of stealing from others to please your clients and grow your pocket book while honestly seeing yourself as the good guy helping out little mom n' pop advertisers is breathtaking.

Article: https://adtechexplained.com/google-project-bernanke-explaine... Major points to anyone who can find the actual slides, they're made for middle managers so very digestible, and they have the hilariously illegal "ATTORNEY-CLIENT PRIVILEGE" warnings up top that Google is now known for. But somehow they're nowhere to be found as of today, even on Kagi.

If nothing else, once the dust settles and the redactions clear this will be a fascinating snapshot of how normal, kind people are made to do wildly asocial things with a smile on their face. I never once met a single person at Google who wasn't kind, intelligent, and well-spoken. And yet...

[+] ggm|1 year ago|reply
I'm going to make a prediction. There may be some good outcomes from this, and some bad ones.

I'd say there would be more good outcomes if Google was made to segment in several planes at once, across product and location, and if transfer pricing models were forbidden.

Basically, if the EU and a competent Asian market regulator got involved as well.

I don't see why alphabet can't share s.w. over the federated Google.eu and like, but with datacenter locality maintained jurisdictionally.

BTW, if anyone wants to run "inevitable balkanisaion of the internet" it's an interesting topic. Because it may be true, and it may still be true more benefit than harm stems.

[+] blackeyeblitzar|1 year ago|reply
Google controlling web standards and owning Chrome is a big part of the problem. They get to only allow changes that protect their monopolies, allow invasion of privacy, avoid commoditization of their native Android APIs etc.
[+] Havoc|1 year ago|reply
I don’t see google walking away from this unscathed.

No doubt there will be much squabbling about definitions but seems pretty obvious that it is. Eg See browser market. There is basically no competition. And the competition is Firefox that Google is funding heavily to keep it alive - arguable to avoid being called a monopoly. That’s basically an admission in itself.

[+] gerash|1 year ago|reply
Instagram ads are as big as Google ads if not bigger (ask any teenager) but this DOJ is on a mission it seems.
[+] freediver|1 year ago|reply
They’re chasing ad tech monopolies but missing the point. Ads ruin user experience, violate privacy, and have become a global tax on the web - paid by the most vulnerable, non-tech-savvy users. It’s not just about competition. It’s about building something better for the people. Focus on that, and the rest will follow.
[+] ilrwbwrkhv|1 year ago|reply
Fantastic. Hopefully Google is broken up completely. And then do Amazon and Facebook next. This mental oligarchy has gone on for too long. We need to go back to capitalism and a healthy playing field.
[+] curiousWaste|1 year ago|reply
I don't really feel the "power" of google in any way. Search is so crappy i rarely even use it.
[+] christina97|1 year ago|reply
This is focused on the customer: advertisers, not the end users like you.
[+] bediger4000|1 year ago|reply
I'm sorry, I have a very cynical view of this. The economics of it - don't matter. If the US couldn't break up Microsoft in 2000, all this trial indicates is that Google got on someone's bad side.
[+] TZubiri|1 year ago|reply
I'm not convinced this will go anywhere.

For one, the entry to compete is very low with something like Google Search, same with web browsers. I will admit that Operating Systems are winner take all monopolies and as any other such monopoly should be regulated.

But everyone has the freedom to download another browser, it's open protocols which anyone can implement. And search? You literally Ctrl+L and type bing.com from a user perspective. From a competitor's perspective you just write a web crawler and run it, it's a CompSci year 1 project.