17 ms·

Google says it doesn't monopolize digital ad market – senators don't buy it

338 points by belltaco 6y ago

mtgx 6y ago
What did they think was going to happen when Google bought the largest mobile ad network by far for both Android and iOS a decade ago? (AdMob) Antitrust agencies and governments in general need to set more pro-active ground rules that attempt to prevent monopolies from even happening in the first place. Punishing them after the fact is both ineffective and too disruptive. I'd rather they didn't allow Google to buy AdMob instead of forcing them to spin it off now. I mean, sure, I'll take it. Still better than nothing. But this shouldn't have been needed because AdMob should have remained a competitor to Google in the mobile ads space, not a division of it. If large corporations think they have made so much money from their core market that now it's time to spread to new markets, then they must also have the money to start their own competitor in that market from scratch. They shouldn't be allowed to just buy everyone up from that new market. I think we'd have WAY healthier "free markets" - and more importantly, high competition - if this one thing was implemented.
- dialtone 6y ago
  As much as I agree with the core of what you are saying, it isn't AdMob that is the issue. It's that Google controls both the marketplace, the pub-side and the buy-side, as well as the browser and the devices used to experience ads. Apple is now aiming for a similar level of control in the ad space very blatantly using their ownership of the platform to do what they want to power themselves up. This vertical integration in the space is what drives the anti-competitive behavior, if the Google buy-side were a separate company that happened to acquire AdMob there would be no real issues as they don't control the whole stack. FB on the other hand sells a service and lets companies use their APIs to integrate as well as competing with them via their internal sales team. These companies can do this only because you are forced to work with them because they own such a large part of internet traffic, not because they offer particularly good services or have better technology or prices.
  - andromeduck 6y ago
    Also because our pyramid shaped tax structure favors vertical integration.
    - zo1 6y ago
      Can you explain/expand your reasoning behind that a little more? This is the first I've encountered such a point.
      - dd36 6y ago
        Progressive corporate taxation?
        zo1 6y ago
        I'm curious about how "pyramid shaped tax structure favors vertical integration". What is a pyramid shaped tax structure? And what about it favors vertical integration? Casual searches on it don't yield much great info atm.
      - andromeduck 6y ago
        Tax pyramids occur when the total value is taxed at each point of sale instead of the value added. This results in taxes being taxed which effectively increases the tax paid on earlier stages. For example, very few would find it reasonable for a 100% excise tax to be applied to alcohol or automobiles but less would object to a 30% tax and legislating a certain structure for the sale of alcohol, for example farm -> brewery -> distributor -> retail or manufacturer -> dealership, that effective results 185% or 69% whilst only having the appearance of charging 30%. The easiest and most effective way to reduce this tax burden is simply expanding your vertical. This is why tesla is so staunchly against third party dealerships or why hyperscalers and apple, google, microsoft, and amazon are all starting to make their own chips. Breaking up big tech won't accomplish anything in the long term without fixing the broken tax system and the incentives it creates.
  - wbl 6y ago
- yokaze 6y ago
  To my knowledge, the US government has wide ranging powers to prevent and break up monopolies. Thanks to standard oil and at&t. The acquisition needed approval: https://www.ftc.gov/enforcement/cases-proceedings/closing-letters/google-incadmob-inc https://www.ftc.gov/enforcement/cases-proceedings/closing-le... It's just that the current political climate (including democrats) seem to favour non-intervention.
  - zmflavius 6y ago
    Not just current, more like "in general since the 70s". This was mostly due to the legal doctrines of Robert Bork, who was Solicitor-General during Nixon and held great influence from the late 70s, which stated that the only good reason to engage in antitrust was to increase consumer welfare (and implicitly, if antitrust would reduce consumer outcomes, antitrust is wrong). The idea basically boils down to "the customer is always right." Now of course, many arguments being made today are that where the negative effects of a monopoly are felt aren't primarily with consumers, but with smaller enterprises being squeezed out, and with workers at a monopoly deprived of choice, both commonly cited with Amazon. Bork's stance was that these aren't legitimate reasons to engage in antitrust and really end up protecting inefficient existing enterprises. Anyhow, Bork's Antitrust Paradox (https://www.amazon.com/dp/0029044561/ref=cm_sw_r_cp_apa_fab_.BGyFbDMKEKAY https://www.amazon.com/dp/0029044561/ref=cm_sw_r_cp_apa_fab_...) was and is one of the most cited books in antitrust law, mostly to make the case as to why antitrust in a particular situation is not merited, and the Supreme and lower courts have adopted views from there directly dozens of times. So it's not just a recent thing, it's a long running, over 40 years now thing
- Nemo_bis 6y ago
  > The Competition and Markets Authority has completed its market study into online platforms and the digital advertising market in the UK. https://www.gov.uk/cma-cases/online-platforms-and-digital-advertising-market-study https://www.gov.uk/cma-cases/online-platforms-and-digital-ad... See the analysis on DoubleClick etc. there.
02020202 6y ago
If gulag says it, then it must be true.
- yaacov 6y ago
  I work at google. My grandfather spent a couple years in a Gulag. We both got free food at work, but I’m allowed to leave at the end of the day, and my job is writing code instead of counting dead people.
  - mrpickels 6y ago
    You are working in a company that is using the smartest people to optimize the ad conversion funnel to sell to people some useless bullshit. At least your grandfather saw the result of his work.
  - secondcoming 6y ago
    Counting dead people should be quite easy with HyperLogLog
curiousgal 6y ago
Same senators who thought Google made iPhones? Not defending Google but I am saying that most of those senators are not the holders of truth when it comes to technology.
- Razengan 6y ago
  I don’t know, some people here seem pretty confident in the knowledge of senators etc. when it comes to calls for investigations into Apple.
- JumpCrisscross 6y ago
  > most of those senators are not the holders of truth when it comes to technology They don’t have to be. Their staffers do. I’ve worked with a number of staffers on these questions for about three years now. They’re some of the smartest people I’ve worked with in my career, which has centred around Wall Street and Silicon Valley.
  - mondoshawan 6y ago
    So why aren't they the senators instead of the morons they back?
    - qaq 6y ago
      would people actually vote for them?
      - mhh__ 6y ago
        Combining brains and charisma is very rare in a politician. Obama being the textbook example - senior law school lecturer but also has the emotional depth and natural charm.
        scarface74 6y ago
        And he was accused of being a “secret Muslim” trying to bring Sharia law by a large percentage of the population. That and trying to use the military to “takeover” Texas.
deepstack 6y ago
The internet the way is currently design will resulted in centralisation and end up with monopoly or oligopoly.
- adrianN 6y ago
  Any system in which network effects and winner-takes-all exist result in centralization and monopoly. I don't think you could design the Internet differently to avoid this.
  - rcMgD2BwE72F 6y ago
    Ban indirect monetization of private data if it is not an opt-in feature separated from the rest.
    - dandelo1953 6y ago
      This! I am completely confounded that I have not heard of any real legislative proposals to establish a clear separation of duties in regards storing data and selling it. There is an obvious conflict of interest if you both have my data and are granted free reign to do what you want with it (via click through agreements that modern society is now dependent upon) you have unfair leverage over me. If you are able to do this en mass without much competition... I'm thankful things haven't gotten worse than they are. Something similar to Glass-Steagall is desperately needed in the digital era. Hopefully somebody is working on it...
    - foepys 6y ago
      So, GDPR?
  - creddit 6y ago
    What is the network effect for Google?
  - deepstack 6y ago
    One thing off top of the head is For example: If the DNS was initially designed as such as https://handshake.org https://handshake.org could be a better place to lay the foundation of Internet.
ricardo81 6y ago
The UK recently evaluated the online ad market and found that Google and Facebook commanded 70% of all online ad spend in the country [0]. Their large pool of advertisers also helps them command a higher return per search compared to other platforms, allowing them to outbid its peers to become the default search choice on devices, e.g. Apple products. Their lack of privacy sensitive policy also helps their ad targeting. Generally to me it seems hard for new entrants to make any inroads for market share when there's a self-perpetuating cycle like that. [0] https://www.gov.uk/government/news/cma-lifts-the-lid-on-digital-giants https://www.gov.uk/government/news/cma-lifts-the-lid-on-digi...
- tehlike 6y ago
  Fb could disrupt google because it had the impressions first, so that is the dimension to think about. Adspend and advertiser pool is a by product. Disclaimer: current fb, ex google employee.
  - philipov 6y ago
    Fb is also a problem, so relying on them isn't going to solve anything. A cartel or oligopoly is not a better situation than a monopoly. For there to be a healthy market, it needs to be possible for small business to compete. If that's not possible in a market, then it needs to be regulated like a public utility.
    - indigochill 6y ago
      > If that's not possible in a market, then it needs to be regulated like a public utility. What I don't understand here is does this not just hand Google the monopoly but now with government protection? Because they're already in place, so who's gonna offer this public utility? We see similar situations with, e.g. cellular carriers in the states, where wherever you live, you only get not-even-a-handful of choices. And how does a country regulate an international "utility"? For Google to maintain its global position, it needs to consider not just local regulations, but also those in international markets. Public utilities so far have always had a limited area of operation.
quyleanh 6y ago
So does Facebook monopolize? lol
rch 6y ago
My impressession is that politicians prefer Facebook over Google.
- mhh__ 6y ago
  Google don't seem to be as interested in playing the game as facebook.
  - bjo590 6y ago
    They are all playing the same game, but the niches they found success force them to play differently. Google tried to take over fb.com with g+. FB tried to attack android with fb phones. They both are fighting over direct direct messaging with Hangouts/messenger/whatsapp. There is just as much politics in Youtube as there is in Facebook.
knolax 6y ago
Controversial opinion here but I support monopolies. Compare the innovation that came out of Bell Labs when Bell had a monopoly vs. the stagnation that exists with the current telecom oligpoly. Most tech companies are natural monopolies so they're never going to exist on a purely competitive market, so it's a choice between oligpoly and monopoly, in which case the latter is far better for funding research.
- johneth 6y ago
  Perhaps, in some cases, monopolies should be publicly-owned, rather than private enterprise.
  - Razengan 6y ago
    Wasn’t that one of the premises of communist states, that the Land of the Free was supposed to avoid?
    - doukdouk 6y ago
      State-owned monopolies exist in most capitalist countries, from operating prisons, to managing railroad or telecom infrastructure, to nuclear energy. The US may have fewer of those than say, the UK or France or Singapore, but I would not call those countries _communist_.
    - nerdponx 6y ago
      Not really. Different communist states have had different goals at different times. For example, nobody here is proposing collectivized agriculture (collectivized compute programming?), or purges of people perceived to be members of the bourgeois class.
    - input_sh 6y ago
      God I wish at least 5% of people I see mentioning communism or socialism could properly define either of those terms.
- belly_joe 6y ago
blablablerg 6y ago
If Google buys them some more, then the senators might buy it.
eqtn 6y ago
make targeted advertising opt in. Make the opt in scary like how android enables the installation of apk's from unknown sources.
- amelius 6y ago
  Just ban targeted advertising, but allow websites that ask the user to tell about themselves in order to get tailored product recommendations.
  - justaguyhere 6y ago
    Or educate users to pay for quality and make quality websites/products so we don't have to depend on advertising. This would be insanely difficult to pull off, but it is at least worth a try. The incumbents have trained users to expect everything on the internet for free. People think they pay $75 (or whatever their internet connection costs) and that should cover everything - news, search, email... How many people even pay for super important stuff like email? No wonder ads are everywhere, like bad smell.
    - Nasrudith 6y ago
      That sounds like you are asking the customer to serve the market instead of the market to serve the customer.
    - throwaways885 6y ago
      $75 should cover the basics, including a sub to Facebook/Google if you want it. It's far too much to pay for only the internet pipes.
  - thinkharderdev 6y ago
    I recently listened to a podcast with Jason Furman and he made an interesting distinction. He distinguished between companies that grow to be very large through organic growth vs companies that grow very large through acquisitions. He used Walmart as an example of the former. They grew by being really good at logistics and having a really efficient supply chain, so they could offer lower prices and ultimately open a lot of stores. He used Google as an example of the latter. Obviously the search tech was their own but basically all of the ad tech (what they actually generate revenue with) was cobbled together through acquisitions.
throwaway_kufu 6y ago
What so many people fail to realize about these issues vis-a-vis Google, it’s not so much the issues of Google having a monopoly or not on the ad market...in either case google is a dominant market incumbent that uses its position (in this case web traffic, data and online ad platform) to unfairly compete and stifle competition. Google has often used data acquired through their market position to start subsidiaries to unfairly compete with their ad customers. The reason it’s unfair is because Google has not just the ad data but the web search data, this often results in a Google ad customer going from #1 google Organic search result for key terms, to #2 to Google’s competing subsidiary. Worse from going from #1 to #2 to a google product, the natural instinct to save the business is to increase ad spend to be sure you are still the #1 ad to our place the google at the top of organic search, of course ad spend goes right into the pocket of your new competitors core business anyway, and in many instances googles subsidiary will start bidding for your same keywords so they literally can’t lose competing with your business rather the have basically acquired an off form of rent seeking equity or they kill your business and become the market incumbent. Of course the kicker are those instances a google subsidiary gets a custom tool at the top of google results (such as Flights) above both organic and ads.
- perlpimp 6y ago
  good point, when your ad funnel is almost the size the internet(search, gmail) ... and traffic gravity of a black hole.
- doukdouk 6y ago
  Words get abused a lot, and for some of them, they do not have a clear-cut, universally agreed upon meaning. "Monopoly" is one of such words (others candidate include: freedom, democracy, justice). When random person X complains about, say, Google having a monopoly, there are two possibilities: - Person X means something along "Google has a dominant market position and abuses its power", slightly abusing the meaning of "monopoly". - Person X means Google is literally a monopoly, that it is not possible to get online ads otherwise and does not know that firms such as Facebook exist. Somehow a lot of people choose to believe interpretation #2 is true, and spend a lot of time debating whether this or that company is a "monopoly" as if it is somehow more important than the substantive issues.
blippage 6y ago
Here's a simple heuristic for determining if a company has a monopoly: if they say that they have a monopoly, then they don't; if they say that they don't, then they do. Original author unknown.
- spunker540 6y ago
  It sounds like Peter Thiel’s idea (though who knows where he got it from)
- quest88 6y ago
  My app with 0 customers is not a monopoly. Am I now a monopoly?
  - jtsiskin 6y ago
    This isn’t what the expression is referring to
nl 6y ago
The headline doesn't quite convey what the argument seems to be: Google is involved in nearly every step in the chain between advertisers seeking to place their ads and the publishers selling space on their websites. Hawley pointed to findings from the United Kingdom's antitrust regulator showing that Google has dominant positions in various parts of the ad technology market, ranging from 40% to more than 90%. There could be some merit in that argument. But the way it is usually made ("Google (or Google+FB) monopolizes the digital ad market") seems easy to refute: just look at the demand for TikTok, and Snapchat is pulling in over $500M (revenue) a quarter and back to robust growth after some missteps a year or two ago. And Twitch ads & sponsorships are huge. Even the UK investigation found Google+FB only controlled 70% of the market (which I believe is less than the major newspaper publishers controlled in the newspaper heyday)
mensetmanusman 6y ago
If Congress cuts Google into pieces, they should be consistent and set some sort of maximum market value (as a percentage of US GDP). That way, once companies reach a certain size, they can expect a split. I actually think this would be good for society, because it would shuffle things up consistently to force new ideas. Also, smaller companies can grow more effectively, so the stock market should enjoy that as well.
- deleted 6y ago
  [deleted]
- wuunderbar 6y ago
  And then how do US companies then compete with overseas companies that don’t have this setback?
  - throwaways885 6y ago
    Other than the US regulating the shit out of overseas companies like China does, they can't.
cletus 6y ago
I like the definition of anticompetitive behaviour that revolves around using power in one market to squash competitors in another. Example: back in the 90s when Microsoft found itself at the pointy end of an antitrust effort, they did things like: - Restricting OEMs from installing non-Windows OSs - When they didn't restrict it, they effectively did by having more favourable pricing per license if Windows was the only OS you shipped - They did similar things with Office but it was less egregious - Restrictions on preinstalling Netscape - Restrictions on default browser - Using Windows to hinder competitors by breaking existing applications, giving a head start to MS software or moving core functionality into the OS (as they tried with IE) Here are some theoretical examples of what anticompetitive behaviour might look like: - Making AdWords usage exclusive (ie you couldn't also use Bing's version) - Making Doubleclick exclusive - Making either effectively exclusive by providing preferential pricing for exclusive use - Making use of one ad platform require use of another Antitrust doesn't exist to protect competitors from competition. People forget that. There are (many) competing display ad platforms. There's less competition in search (and thus search ads). But you can create your own search engine as Bing and DDG are witness to (plus all the dead ones). It's just that all the other search engines suck. Or, perhaps more accurately, Google is seriously good at search in a way that's hard to replicate. I personally don't think we should go down this road of dismantling companies just because their competitors suck. That's the Yelp business model. Yelp hasn't changed in 10 years. They have so many missed opportunities. But no, "Google is stealing our content". Microsoft has the financial muscle to fund a search engine. They do of course. But Google is much better. Just because Microsoft sucks it doesn't (necessarily) mean that Google is a problem.
- jeffbee 6y ago
  > Antitrust doesn't exist to protect competitors from competition That's in America. In Europe, it actually does.
dalbasal 6y ago
EU courts have arrived at similar conclusions re: Adwords. Specifically, they found that adwords does this sort of thing to its "search partners," competitors to google monetising via Adwords. Google fought it, lost it, and then took its puny (in google terms) $1.5bn fine as a (affordable) cost of doing business. They certainly would have be happy to pay more than this for the gains they made by operating this way. The issue with Antitrust as it is, is that the "crime" requires active proof and specificity. Essentially, the (practically) inevitable side effects of market dominance. You might need to prove specific violations like price fixing or (like with Adwords, Amazon and other current cases) using market data to gain an edge as a participant. You might need to prove market dominance by "proving" price effects and other microeconomic effects. The problem is, these are hard to prove. You certainly can't prove all of them. But, they are a problem to the extent that monopolies exist. An occasional, multi year case ending in a fine <5% of annual revenue... this is a farce. Antitrust law is having almost no effects. It doesn't help that software economics are very different, and that a lot of both theory and legislation practically assumes that the "market" is commodity-like. It just so happens that dominating literal "marketplaces" like adwords, amazon marketplace, etc. is an area with precedents. Meanwhile, it's not like we particularly care if the adwords marketplace is efficient. There is simultaneously a massive public interest in 2020 monopolies, ooh. Otoh, the cases that prosecutors are making are very disconnected from the actual public interest. The public isn't all that interested in ad marketplaces being "better," cheaper or whatnot.
tw04 6y ago
I find it ridiculously disingenuous of the DOJ to pursue Google for "monopoly" of the advertising market, while allowing Sinclair Broadcasting to do literally the exact same thing to local TV stations and the related local advertising markets. While this may not be a political witch hunt - it sure quacks like a duck. https://en.wikipedia.org/wiki/Sinclair_Broadcast_Group https://en.wikipedia.org/wiki/Sinclair_Broadcast_Group
- temp667 6y ago
  Yep - these same govt officials falling over themselves to actually remove long standing laws and protections in this area. It's so political its horrible.
- seanhunter 6y ago
  The DOJ should pursue both companies if they think they are illegal monopolies. They don't need to do things serially. There may be a non-obvious reason that Sinclair isn't (visibly) being pursued.
jeffbee 6y ago
You can't count on senators to know what they are talking about. This article from yesterday I found quite helpful in explaining the details of the situation. https://truthonthemarket.com/2020/09/14/the-antitrust-case-against-googles-adtech-business-explained/ https://truthonthemarket.com/2020/09/14/the-antitrust-case-a...
- Guereric 6y ago
  Thanks, I learned much about the workings of ad space from reading it.
LatteLazy 6y ago
No one seems to agree on what the problem is or what the solution is. Any "solutions" are complex and it's hard to predict the outcomes of implementation. The motives of politicians implimenting these solutions have never been less reliable or more corrupt or short-term-ist as far as I know. And in the background we have problems 100 times larger than whatever Google is meant to be: the collapse of democracy, climate change, Chinas rise in power and fall in decency etc.
RockmanZero 6y ago
I don't buy it neither
Animats 6y ago
Google doesn't quite have a monopoly, but Google, Facebook, and Amazon together have 70% of online ad spend.[1] [1] https://marketingland.com/almost-70-of-digital-ad-spending-going-to-google-facebook-amazon-says-analyst-firm-262565 https://marketingland.com/almost-70-of-digital-ad-spending-g...
kirillzubovsky 6y ago
Despite what Government thinks of Google, I think holding antitrust hearings is just a political theatre. At the end of the day they might slap Google with a penalty which by all accounts will be just a margin of error tax write off. If the government really wants to encourage competition, they need to enable creation of new businesses, plain and simple. Google isn't a Monopoly as much as they just have the most eyeballs because they built a great company. But Facebook, Pinterest, Snapchat, Reddit, and a few dozen smaller players, are all the answer to Google's monopoly. I've just spent a few days testing different ad segments, and for the one I was doing, it turns out Reddit was 5x cheaper than the next cheapest source. Cool right? What we need is more companies that are able to capture eyeballs, and an efficient mechanism to distribute ads among them.
- johnward 6y ago
  > Reddit was 5x cheaper than the next cheapest source I applaud anyone that can monetize the reddit audience. I've dabbled in their ad platform and had no luck at all.
pruthvishetty 6y ago
Of course. There are some other players. Facebook, being one of the biggest. Twitter, Snap, Tiktok, to name a few.

338 points by belltaco 6y ago

mtgx 6y ago

What did they think was going to happen when Google bought the largest mobile ad network by far for both Android and iOS a decade ago? (AdMob) Antitrust agencies and governments in general need to set more pro-active ground rules that attempt to prevent monopolies from even happening in the first place. Punishing them after the fact is both ineffective and too disruptive. I'd rather they didn't allow Google to buy AdMob instead of forcing them to spin it off now. I mean, sure, I'll take it. Still better than nothing. But this shouldn't have been needed because AdMob should have remained a competitor to Google in the mobile ads space, not a division of it. If large corporations think they have made so much money from their core market that now it's time to spread to new markets, then they must also have the money to start their own competitor in that market from scratch. They shouldn't be allowed to just buy everyone up from that new market. I think we'd have WAY healthier "free markets" - and more importantly, high competition - if this one thing was implemented.

dialtone 6y ago
As much as I agree with the core of what you are saying, it isn't AdMob that is the issue. It's that Google controls both the marketplace, the pub-side and the buy-side, as well as the browser and the devices used to experience ads. Apple is now aiming for a similar level of control in the ad space very blatantly using their ownership of the platform to do what they want to power themselves up. This vertical integration in the space is what drives the anti-competitive behavior, if the Google buy-side were a separate company that happened to acquire AdMob there would be no real issues as they don't control the whole stack. FB on the other hand sells a service and lets companies use their APIs to integrate as well as competing with them via their internal sales team. These companies can do this only because you are forced to work with them because they own such a large part of internet traffic, not because they offer particularly good services or have better technology or prices.
- andromeduck 6y ago
  Also because our pyramid shaped tax structure favors vertical integration.
  - zo1 6y ago
    Can you explain/expand your reasoning behind that a little more? This is the first I've encountered such a point.
    - dd36 6y ago
      Progressive corporate taxation?
      - zo1 6y ago
        I'm curious about how "pyramid shaped tax structure favors vertical integration". What is a pyramid shaped tax structure? And what about it favors vertical integration? Casual searches on it don't yield much great info atm.
    - andromeduck 6y ago
      Tax pyramids occur when the total value is taxed at each point of sale instead of the value added. This results in taxes being taxed which effectively increases the tax paid on earlier stages. For example, very few would find it reasonable for a 100% excise tax to be applied to alcohol or automobiles but less would object to a 30% tax and legislating a certain structure for the sale of alcohol, for example farm -> brewery -> distributor -> retail or manufacturer -> dealership, that effective results 185% or 69% whilst only having the appearance of charging 30%. The easiest and most effective way to reduce this tax burden is simply expanding your vertical. This is why tesla is so staunchly against third party dealerships or why hyperscalers and apple, google, microsoft, and amazon are all starting to make their own chips. Breaking up big tech won't accomplish anything in the long term without fixing the broken tax system and the incentives it creates.
- wbl 6y ago
yokaze 6y ago
To my knowledge, the US government has wide ranging powers to prevent and break up monopolies. Thanks to standard oil and at&t. The acquisition needed approval: https://www.ftc.gov/enforcement/cases-proceedings/closing-letters/google-incadmob-inc https://www.ftc.gov/enforcement/cases-proceedings/closing-le... It's just that the current political climate (including democrats) seem to favour non-intervention.
- zmflavius 6y ago
  Not just current, more like "in general since the 70s". This was mostly due to the legal doctrines of Robert Bork, who was Solicitor-General during Nixon and held great influence from the late 70s, which stated that the only good reason to engage in antitrust was to increase consumer welfare (and implicitly, if antitrust would reduce consumer outcomes, antitrust is wrong). The idea basically boils down to "the customer is always right." Now of course, many arguments being made today are that where the negative effects of a monopoly are felt aren't primarily with consumers, but with smaller enterprises being squeezed out, and with workers at a monopoly deprived of choice, both commonly cited with Amazon. Bork's stance was that these aren't legitimate reasons to engage in antitrust and really end up protecting inefficient existing enterprises. Anyhow, Bork's Antitrust Paradox (https://www.amazon.com/dp/0029044561/ref=cm_sw_r_cp_apa_fab_.BGyFbDMKEKAY https://www.amazon.com/dp/0029044561/ref=cm_sw_r_cp_apa_fab_...) was and is one of the most cited books in antitrust law, mostly to make the case as to why antitrust in a particular situation is not merited, and the Supreme and lower courts have adopted views from there directly dozens of times. So it's not just a recent thing, it's a long running, over 40 years now thing
Nemo_bis 6y ago
> The Competition and Markets Authority has completed its market study into online platforms and the digital advertising market in the UK. https://www.gov.uk/cma-cases/online-platforms-and-digital-advertising-market-study https://www.gov.uk/cma-cases/online-platforms-and-digital-ad... See the analysis on DoubleClick etc. there.

02020202 6y ago

If gulag says it, then it must be true.

yaacov 6y ago
I work at google. My grandfather spent a couple years in a Gulag. We both got free food at work, but I’m allowed to leave at the end of the day, and my job is writing code instead of counting dead people.
- mrpickels 6y ago
  You are working in a company that is using the smartest people to optimize the ad conversion funnel to sell to people some useless bullshit. At least your grandfather saw the result of his work.
- secondcoming 6y ago
  Counting dead people should be quite easy with HyperLogLog

curiousgal 6y ago

Same senators who thought Google made iPhones? Not defending Google but I am saying that most of those senators are not the holders of truth when it comes to technology.

Razengan 6y ago
I don’t know, some people here seem pretty confident in the knowledge of senators etc. when it comes to calls for investigations into Apple.
JumpCrisscross 6y ago
> most of those senators are not the holders of truth when it comes to technology They don’t have to be. Their staffers do. I’ve worked with a number of staffers on these questions for about three years now. They’re some of the smartest people I’ve worked with in my career, which has centred around Wall Street and Silicon Valley.
- mondoshawan 6y ago
  So why aren't they the senators instead of the morons they back?
  - qaq 6y ago
    would people actually vote for them?
    - mhh__ 6y ago
      Combining brains and charisma is very rare in a politician. Obama being the textbook example - senior law school lecturer but also has the emotional depth and natural charm.
      - scarface74 6y ago
        And he was accused of being a “secret Muslim” trying to bring Sharia law by a large percentage of the population. That and trying to use the military to “takeover” Texas.

deepstack 6y ago

The internet the way is currently design will resulted in centralisation and end up with monopoly or oligopoly.

adrianN 6y ago
Any system in which network effects and winner-takes-all exist result in centralization and monopoly. I don't think you could design the Internet differently to avoid this.
- rcMgD2BwE72F 6y ago
  Ban indirect monetization of private data if it is not an opt-in feature separated from the rest.
  - dandelo1953 6y ago
    This! I am completely confounded that I have not heard of any real legislative proposals to establish a clear separation of duties in regards storing data and selling it. There is an obvious conflict of interest if you both have my data and are granted free reign to do what you want with it (via click through agreements that modern society is now dependent upon) you have unfair leverage over me. If you are able to do this en mass without much competition... I'm thankful things haven't gotten worse than they are. Something similar to Glass-Steagall is desperately needed in the digital era. Hopefully somebody is working on it...
  - foepys 6y ago
    So, GDPR?
- creddit 6y ago
  What is the network effect for Google?
- deepstack 6y ago
  One thing off top of the head is For example: If the DNS was initially designed as such as https://handshake.org https://handshake.org could be a better place to lay the foundation of Internet.

ricardo81 6y ago

The UK recently evaluated the online ad market and found that Google and Facebook commanded 70% of all online ad spend in the country [0]. Their large pool of advertisers also helps them command a higher return per search compared to other platforms, allowing them to outbid its peers to become the default search choice on devices, e.g. Apple products. Their lack of privacy sensitive policy also helps their ad targeting. Generally to me it seems hard for new entrants to make any inroads for market share when there's a self-perpetuating cycle like that. [0] https://www.gov.uk/government/news/cma-lifts-the-lid-on-digital-giants https://www.gov.uk/government/news/cma-lifts-the-lid-on-digi...

tehlike 6y ago
Fb could disrupt google because it had the impressions first, so that is the dimension to think about. Adspend and advertiser pool is a by product. Disclaimer: current fb, ex google employee.
- philipov 6y ago
  Fb is also a problem, so relying on them isn't going to solve anything. A cartel or oligopoly is not a better situation than a monopoly. For there to be a healthy market, it needs to be possible for small business to compete. If that's not possible in a market, then it needs to be regulated like a public utility.
  - indigochill 6y ago
    > If that's not possible in a market, then it needs to be regulated like a public utility. What I don't understand here is does this not just hand Google the monopoly but now with government protection? Because they're already in place, so who's gonna offer this public utility? We see similar situations with, e.g. cellular carriers in the states, where wherever you live, you only get not-even-a-handful of choices. And how does a country regulate an international "utility"? For Google to maintain its global position, it needs to consider not just local regulations, but also those in international markets. Public utilities so far have always had a limited area of operation.

quyleanh 6y ago

So does Facebook monopolize? lol

rch 6y ago

My impressession is that politicians prefer Facebook over Google.

mhh__ 6y ago
Google don't seem to be as interested in playing the game as facebook.
- bjo590 6y ago
  They are all playing the same game, but the niches they found success force them to play differently. Google tried to take over fb.com with g+. FB tried to attack android with fb phones. They both are fighting over direct direct messaging with Hangouts/messenger/whatsapp. There is just as much politics in Youtube as there is in Facebook.

knolax 6y ago

Controversial opinion here but I support monopolies. Compare the innovation that came out of Bell Labs when Bell had a monopoly vs. the stagnation that exists with the current telecom oligpoly. Most tech companies are natural monopolies so they're never going to exist on a purely competitive market, so it's a choice between oligpoly and monopoly, in which case the latter is far better for funding research.

johneth 6y ago
Perhaps, in some cases, monopolies should be publicly-owned, rather than private enterprise.
- Razengan 6y ago
  Wasn’t that one of the premises of communist states, that the Land of the Free was supposed to avoid?
  - doukdouk 6y ago
    State-owned monopolies exist in most capitalist countries, from operating prisons, to managing railroad or telecom infrastructure, to nuclear energy. The US may have fewer of those than say, the UK or France or Singapore, but I would not call those countries _communist_.
  - nerdponx 6y ago
    Not really. Different communist states have had different goals at different times. For example, nobody here is proposing collectivized agriculture (collectivized compute programming?), or purges of people perceived to be members of the bourgeois class.
  - input_sh 6y ago
    God I wish at least 5% of people I see mentioning communism or socialism could properly define either of those terms.
belly_joe 6y ago

blablablerg 6y ago

If Google buys them some more, then the senators might buy it.

eqtn 6y ago

make targeted advertising opt in. Make the opt in scary like how android enables the installation of apk's from unknown sources.

amelius 6y ago
Just ban targeted advertising, but allow websites that ask the user to tell about themselves in order to get tailored product recommendations.
- justaguyhere 6y ago
  Or educate users to pay for quality and make quality websites/products so we don't have to depend on advertising. This would be insanely difficult to pull off, but it is at least worth a try. The incumbents have trained users to expect everything on the internet for free. People think they pay $75 (or whatever their internet connection costs) and that should cover everything - news, search, email... How many people even pay for super important stuff like email? No wonder ads are everywhere, like bad smell.
  - Nasrudith 6y ago
    That sounds like you are asking the customer to serve the market instead of the market to serve the customer.
  - throwaways885 6y ago
    $75 should cover the basics, including a sub to Facebook/Google if you want it. It's far too much to pay for only the internet pipes.
- thinkharderdev 6y ago
  I recently listened to a podcast with Jason Furman and he made an interesting distinction. He distinguished between companies that grow to be very large through organic growth vs companies that grow very large through acquisitions. He used Walmart as an example of the former. They grew by being really good at logistics and having a really efficient supply chain, so they could offer lower prices and ultimately open a lot of stores. He used Google as an example of the latter. Obviously the search tech was their own but basically all of the ad tech (what they actually generate revenue with) was cobbled together through acquisitions.

throwaway_kufu 6y ago

What so many people fail to realize about these issues vis-a-vis Google, it’s not so much the issues of Google having a monopoly or not on the ad market...in either case google is a dominant market incumbent that uses its position (in this case web traffic, data and online ad platform) to unfairly compete and stifle competition. Google has often used data acquired through their market position to start subsidiaries to unfairly compete with their ad customers. The reason it’s unfair is because Google has not just the ad data but the web search data, this often results in a Google ad customer going from #1 google Organic search result for key terms, to #2 to Google’s competing subsidiary. Worse from going from #1 to #2 to a google product, the natural instinct to save the business is to increase ad spend to be sure you are still the #1 ad to our place the google at the top of organic search, of course ad spend goes right into the pocket of your new competitors core business anyway, and in many instances googles subsidiary will start bidding for your same keywords so they literally can’t lose competing with your business rather the have basically acquired an off form of rent seeking equity or they kill your business and become the market incumbent. Of course the kicker are those instances a google subsidiary gets a custom tool at the top of google results (such as Flights) above both organic and ads.

perlpimp 6y ago
good point, when your ad funnel is almost the size the internet(search, gmail) ... and traffic gravity of a black hole.
doukdouk 6y ago
Words get abused a lot, and for some of them, they do not have a clear-cut, universally agreed upon meaning. "Monopoly" is one of such words (others candidate include: freedom, democracy, justice). When random person X complains about, say, Google having a monopoly, there are two possibilities: - Person X means something along "Google has a dominant market position and abuses its power", slightly abusing the meaning of "monopoly". - Person X means Google is literally a monopoly, that it is not possible to get online ads otherwise and does not know that firms such as Facebook exist. Somehow a lot of people choose to believe interpretation #2 is true, and spend a lot of time debating whether this or that company is a "monopoly" as if it is somehow more important than the substantive issues.

blippage 6y ago

Here's a simple heuristic for determining if a company has a monopoly: if they say that they have a monopoly, then they don't; if they say that they don't, then they do. Original author unknown.

spunker540 6y ago
It sounds like Peter Thiel’s idea (though who knows where he got it from)
quest88 6y ago
My app with 0 customers is not a monopoly. Am I now a monopoly?
- jtsiskin 6y ago
  This isn’t what the expression is referring to

nl 6y ago

The headline doesn't quite convey what the argument seems to be: Google is involved in nearly every step in the chain between advertisers seeking to place their ads and the publishers selling space on their websites. Hawley pointed to findings from the United Kingdom's antitrust regulator showing that Google has dominant positions in various parts of the ad technology market, ranging from 40% to more than 90%. There could be some merit in that argument. But the way it is usually made ("Google (or Google+FB) monopolizes the digital ad market") seems easy to refute: just look at the demand for TikTok, and Snapchat is pulling in over $500M (revenue) a quarter and back to robust growth after some missteps a year or two ago. And Twitch ads & sponsorships are huge. Even the UK investigation found Google+FB only controlled 70% of the market (which I believe is less than the major newspaper publishers controlled in the newspaper heyday)

mensetmanusman 6y ago

If Congress cuts Google into pieces, they should be consistent and set some sort of maximum market value (as a percentage of US GDP). That way, once companies reach a certain size, they can expect a split. I actually think this would be good for society, because it would shuffle things up consistently to force new ideas. Also, smaller companies can grow more effectively, so the stock market should enjoy that as well.

deleted 6y ago
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wuunderbar 6y ago
And then how do US companies then compete with overseas companies that don’t have this setback?
- throwaways885 6y ago
  Other than the US regulating the shit out of overseas companies like China does, they can't.

cletus 6y ago

I like the definition of anticompetitive behaviour that revolves around using power in one market to squash competitors in another. Example: back in the 90s when Microsoft found itself at the pointy end of an antitrust effort, they did things like: - Restricting OEMs from installing non-Windows OSs - When they didn't restrict it, they effectively did by having more favourable pricing per license if Windows was the only OS you shipped - They did similar things with Office but it was less egregious - Restrictions on preinstalling Netscape - Restrictions on default browser - Using Windows to hinder competitors by breaking existing applications, giving a head start to MS software or moving core functionality into the OS (as they tried with IE) Here are some theoretical examples of what anticompetitive behaviour might look like: - Making AdWords usage exclusive (ie you couldn't also use Bing's version) - Making Doubleclick exclusive - Making either effectively exclusive by providing preferential pricing for exclusive use - Making use of one ad platform require use of another Antitrust doesn't exist to protect competitors from competition. People forget that. There are (many) competing display ad platforms. There's less competition in search (and thus search ads). But you can create your own search engine as Bing and DDG are witness to (plus all the dead ones). It's just that all the other search engines suck. Or, perhaps more accurately, Google is seriously good at search in a way that's hard to replicate. I personally don't think we should go down this road of dismantling companies just because their competitors suck. That's the Yelp business model. Yelp hasn't changed in 10 years. They have so many missed opportunities. But no, "Google is stealing our content". Microsoft has the financial muscle to fund a search engine. They do of course. But Google is much better. Just because Microsoft sucks it doesn't (necessarily) mean that Google is a problem.

jeffbee 6y ago
> Antitrust doesn't exist to protect competitors from competition That's in America. In Europe, it actually does.

dalbasal 6y ago

EU courts have arrived at similar conclusions re: Adwords. Specifically, they found that adwords does this sort of thing to its "search partners," competitors to google monetising via Adwords. Google fought it, lost it, and then took its puny (in google terms) $1.5bn fine as a (affordable) cost of doing business. They certainly would have be happy to pay more than this for the gains they made by operating this way. The issue with Antitrust as it is, is that the "crime" requires active proof and specificity. Essentially, the (practically) inevitable side effects of market dominance. You might need to prove specific violations like price fixing or (like with Adwords, Amazon and other current cases) using market data to gain an edge as a participant. You might need to prove market dominance by "proving" price effects and other microeconomic effects. The problem is, these are hard to prove. You certainly can't prove all of them. But, they are a problem to the extent that monopolies exist. An occasional, multi year case ending in a fine <5% of annual revenue... this is a farce. Antitrust law is having almost no effects. It doesn't help that software economics are very different, and that a lot of both theory and legislation practically assumes that the "market" is commodity-like. It just so happens that dominating literal "marketplaces" like adwords, amazon marketplace, etc. is an area with precedents. Meanwhile, it's not like we particularly care if the adwords marketplace is efficient. There is simultaneously a massive public interest in 2020 monopolies, ooh. Otoh, the cases that prosecutors are making are very disconnected from the actual public interest. The public isn't all that interested in ad marketplaces being "better," cheaper or whatnot.

tw04 6y ago

I find it ridiculously disingenuous of the DOJ to pursue Google for "monopoly" of the advertising market, while allowing Sinclair Broadcasting to do literally the exact same thing to local TV stations and the related local advertising markets. While this may not be a political witch hunt - it sure quacks like a duck. https://en.wikipedia.org/wiki/Sinclair_Broadcast_Group https://en.wikipedia.org/wiki/Sinclair_Broadcast_Group

temp667 6y ago
Yep - these same govt officials falling over themselves to actually remove long standing laws and protections in this area. It's so political its horrible.
seanhunter 6y ago
The DOJ should pursue both companies if they think they are illegal monopolies. They don't need to do things serially. There may be a non-obvious reason that Sinclair isn't (visibly) being pursued.

jeffbee 6y ago

You can't count on senators to know what they are talking about. This article from yesterday I found quite helpful in explaining the details of the situation. https://truthonthemarket.com/2020/09/14/the-antitrust-case-against-googles-adtech-business-explained/ https://truthonthemarket.com/2020/09/14/the-antitrust-case-a...

Guereric 6y ago
Thanks, I learned much about the workings of ad space from reading it.

LatteLazy 6y ago

No one seems to agree on what the problem is or what the solution is. Any "solutions" are complex and it's hard to predict the outcomes of implementation. The motives of politicians implimenting these solutions have never been less reliable or more corrupt or short-term-ist as far as I know. And in the background we have problems 100 times larger than whatever Google is meant to be: the collapse of democracy, climate change, Chinas rise in power and fall in decency etc.

RockmanZero 6y ago

I don't buy it neither

Animats 6y ago

Google doesn't quite have a monopoly, but Google, Facebook, and Amazon together have 70% of online ad spend.[1] [1] https://marketingland.com/almost-70-of-digital-ad-spending-going-to-google-facebook-amazon-says-analyst-firm-262565 https://marketingland.com/almost-70-of-digital-ad-spending-g...

kirillzubovsky 6y ago

Despite what Government thinks of Google, I think holding antitrust hearings is just a political theatre. At the end of the day they might slap Google with a penalty which by all accounts will be just a margin of error tax write off. If the government really wants to encourage competition, they need to enable creation of new businesses, plain and simple. Google isn't a Monopoly as much as they just have the most eyeballs because they built a great company. But Facebook, Pinterest, Snapchat, Reddit, and a few dozen smaller players, are all the answer to Google's monopoly. I've just spent a few days testing different ad segments, and for the one I was doing, it turns out Reddit was 5x cheaper than the next cheapest source. Cool right? What we need is more companies that are able to capture eyeballs, and an efficient mechanism to distribute ads among them.

johnward 6y ago
> Reddit was 5x cheaper than the next cheapest source I applaud anyone that can monetize the reddit audience. I've dabbled in their ad platform and had no luck at all.

pruthvishetty 6y ago

Of course. There are some other players. Facebook, being one of the biggest. Twitter, Snap, Tiktok, to name a few.