Big Tech is under fire from governments frustrated with its pervasive societal influence many believe allows it to operate without the checks and balances that constrain legacy industries.
Amazon, Apple, Facebook and Google are facing scrutiny from governments across the globe for a litany of reasons, and the CEOs of all four companies are set to face an antitrust inquisition before Congress today.
The congressional showdown comes after months of reports that state and federal authorities are probing Google’s dominance of the online advertising market and how it relates to the competitive landscape.
The U.S. Department of Justice is reportedly expected to file suit against Google owner Alphabet by the end of 2020. A particular area of concern, sources told Adweek, is Google’s suite of advertising tools (see chart) and whether or not it constitutes a monopoly.
Google owns and operates some of the most recognizable online brands, from its eponymous search engine to its mobile operating system Android and YouTube. Although, it is how it bundles these services with its suite of online ad tools—the vast majority of which are invisible to the public and primarily affect advertisers, media owners and ad-tech middlemen with rival offerings—that is at the center of the DoJ’s inquiries, according to sources.
How the tools function and how they ultimately impact consumers is the main concern. (Watch the video below for more on that.)
A chorus of critics
Critics of Google’s effect on ad-tech’s competitive landscape are not hard to find and in recent months, academic studies have added to the chorus.
Their studies are based on market analysis by the U.K.’s Competition and Markets Authority—a regulator widely perceived as more stringent than its U.S. counterparts—which recently called for a “new regime” to take on tech giants.
In a report published in early July, the CMA announced the formation of a task force to address its competitive concerns.
“Whilst [sic] this recommendation is U.K.-focused, many of the problems that the CMA has identified are international in nature,” the department said. “It will, therefore, continue to take a leading role globally in relation to these issues as part of the CMA’s wider digital strategy.”
U.S. antitrust laws
Three main laws govern U.S. federal antitrust power—the Sherman Antitrust Act, the Clayton Antitrust Act and the Federal Trade Commission Act—each covering various threats to competition. They require prosecutors to prove a company’s actions result in a situation that negatively impacts market competition and ultimately harms consumers.
Speaking with Adweek prior to the CMA’s latest report, Charlotte Slaiman, competition policy director at Public Knowledge, explained how the body, which works alongside economists, lawyers and former public servants, has been looking into Google’s dominance of the market for two years.
“Based on what we can see from the U.K. [interim] report, it does look like an anticompetitive situation that would be illegal under the [U.S.] antitrust laws,” Slaiman said.
David Dinielli, senior advisor, beneficial technology at Omidyar Network, co-authored the report “Roadmap for a Digital Advertising Monopolization Case Against Google,” which drew parallels between the CMA’s findings and U.S. antitrust law.
“A big-picture narrative is that Google has used the power it acquired through search—whether legally or illegally—to try and construct its own walled garden whereby anyone that enters the Google-sphere has to use their services,” Dinielli said.
Multiple sources familiar with regulatory bodies’ inquiries told Adweek there are two specific areas of concern when it comes to the operations of Google’s suite of online advertising tools.