Commentary

How An Antitrust Case Against Google Might Affect Publishers

  • by May 21, 2020
Publishers that complain about losing advertising revenue to Google can now support those claims with a new academic paper that argues the search giant has abused its power.

The company has harmed publishers, advertisers and consumers by stifling competition, according to a report published this week by a former top antitrust economist in the Obama administration.

“Google doesn’t want to develop content so that it wins more Pulitzer Prizes than The New York Times or The Washington Post; that is an expensive undertaking," Fiona Scott Morton, a Yale economics professor who was the chief economist in the Justice Department’s antitrust division, wrote in the paper. "Rather, Google wants to host that attractive content so it can capture the ad dollars that otherwise would go to those publishers.”

Scott Morton's report, titled “Roadmap for a Digital Advertising Monopolization Case Against Google,”  comes as the Justice Department and state attorneys general investigate whether the company has abused its near-monopoly in search to harm competitors.

advertisement

advertisement

Much of the analysis is based on the findings of the U.K.’s Competition and Markets Authority. In December, it published a preliminary study of the country's digital ad market. The U.K. report found that Google's market share in the software used by publishers to show display ads was at least 90%, and it has significant share in other parts of the programmatic marketplace.

Based on those findings, Scott Morton argues that Google has the ability to use its dominance in the digital ad supply chain to steer ad dollars toward its "owned-and-operated" properties like Google Search, YouTube and Google Maps.

The report details 20 cases of Google’s allegedly anti-competitive conduct that makes the digital ad marketplace more obscure. While advertisers likely pay too much and publishers get too little, Google captures at least a 40% cut of those media dollars, the report argues.

Google has pushed backed against publishers that claim they've been harmed, arguing that it doesn't monetize news snippets that appear on its Google News aggregation site or in search results. As I've said before, Google does help to drive traffic to publisher websites that they can monetize.

I've also said that Google's dominance in the programmatic marketplace deserves greater scrutiny, even for publishers that sell remnant inventory through SSPs. Forcing Google to split its programmatic operations from its "owned and operated" properties that compete with publishers is a necessary step in making the marketplace fairer to publishers and their advertisers.

Next story loading loading..