Commentary

Antitrust Suit Against Google ls Disappointing For Publishers

The Justice Department this week finally filed an antitrust lawsuit against Google after more than a year of investigating the business practices of the search giant. The complaint focuses on the company's distribution agreements that help to make it the dominant search engine, but doesn't address the key concerns of publishers.

The lawsuit, which likely will take years to resolve, is more focused on Google's agreements with Apple, telecommunications companies and electronics makers to make its search engine the default for mobile devices. The Justice Department argues that these arrangements give Google an unfair advantage over rivals and limit choices for consumers.

The department is still investigating Google's dominance in the online advertising market, and it's not clear if it will file a separate lawsuit against the company. However, such a suit would be more consequential for publishers.

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Google is an unavoidable presence in the digital ad market, with a market share in the software that publishers use to serve ads that's greater than 90%, according to a study by U.K. competition authorities. Their research also determined that Google controls 40% to 60% of the market for supply-side platforms that publishers use to sell ads in online auctions.

The market dynamics of buying and selling digital ad space in those auctions should make the process ruthlessly efficient, but there are signs the system is broken.

A study this year found that when an advertiser spends $1 on a digital ad placement, only 51 cents eventually reaches the publisher. The rest of that dollar is either captured by various digital middlemen or disappears somewhere in the supply chain.

While it's unfair to blame the inefficiencies of the programmatic ad marketplace entirely on Google, publishers must continue to demand greater transparency from the company, at least until the Justice Department files its next lawsuit.

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