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Google's dominance in online advertising, previous mergers in state AGs' crosshairs
11 September 2019 00:00 by Amy Miller
US state attorneys general are seeking information from Google on its previous acquisitions of Double-Click, AdMob and Admeld, along with its advertising contracts and pricing. While Google has been the subject of dozens of antitrust investigations around the world, the state probe is among the first to directly question the search giant on how it has come to dominate the online advertising world.
Attorneys general from 48 states, Puerto Rico and the District of Columbia announced Monday they are investigating Google for potential antitrust violations. The same day, the states issued a civil investigative demand to the search giant asking dozens of detailed questions about the company’s online advertising practices and past mergers in the industry.
While the initial focus is on advertising and the ad tech market, the states' investigation is expected to broaden as it goes on. More document requests into other areas of Google’s business, including in children’s privacy and consumer privacy, are expected.
At Monday’s press conference, several attorneys general said it's too early in the probe to speculate on remedies. But a breakup of the company — where Google could be required to divest certain aspects of its business — is understood to be under consideration.
For now, Texas is leading the antitrust probe along with Arizona, Colorado, Iowa, Louisiana, Mississippi, Nebraska and North Carolina. The states are understood to be in contact with Australian regulators — who recently completed a significant study into the digital advertising market and its effect on news publishers.
Google has been involved in antitrust investigations since the early 2010s. The European Commission has fined the search giant three times, and has two current probes into allegations of self-preferencing by Google of its local search and job search products.
But the focus on digital advertising and ad tech is more recent. Regulators and lawmakers in Australia and the UK have looked into the digital advertising ecosystem. The UK’s Competition and Markets Authority and France’s competition authority have also opened sector inquiries into online advertising.
The Irish data-protection authority announced in May that it’s investigating Google Ireland — the search giant’s EU business arm — over “processing of personal data in the context of its online Ad Exchange.”
By some estimates, Google has an 80 to 85 percent share in the ad tech market. The company operates businesses on both the supply side — helping third-party websites and publishers that want advertising — and the demand side, assisting companies wanting to place their content. It also operates an ad exchange, a real-time bidding marketplace to buy and sell display advertising space.
On one side of the market, Google Ads helps advertisers create search, display and app ads that can be sold on Google’s own sites. That advertising can also be sold to third-party websites via Google’s AdSense, a service to help place ad inventory on websites, or Google’s Admob, which does the same for apps.
Google Marketing Platform, formerly known as DoubleClick, also operates on the demand side, offering ad servers and analytics to advertisers.
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