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Signs point to another Google antitrust complaint, this time focused on adtech


By Kate Kaye | The Drum

October 23, 2020 | 7 min read

Google could be hit with another multistate antitrust complaint to pile on the US Justice Department’s search-centric suit against the company. State lawyers have been poking at Google’s adtech system for months, asking detailed questions about ad auction mechanics, header bidding, third-party data access and more.

Google has issued new communication guidelines to staff

Is another anti-trust complaint on the way for Google?

A new complaint against Google involving its advertising industry practices is percolating. While the antitrust complaint filed by the US Department of Justice (DOJ) earlier this week is all about Google’s search business, another multistate complaint against the company could come down the pike soon. Signs point to the regulatory net being cast far wider, covering alleged monopolistic practices associated with numerous aspects of Google ad operations.

Eleven attorneys general – all of them Republicans – joined the Department of justice in its October 20 search-focused antitrust complaint against Google. While a complaint addressing Google’s ad tech businesses and practices had been expected for months, some were surprised to see how narrowly focused the DOJ complaint is on the company’s general search services and search ads business.

“The DOJ suit against Google is likely just a first step,” says Chris Pedigo, senior vice-president of government affairs at Digital Content Next, a digital publisher trade group. “Policymakers around the world are becoming increasingly aware of Google’s anti-competitive behavior in many verticals, including the digital advertising marketplace.”

“We plan to conclude parts of our investigation of Google in the coming weeks,” Colorado attorney general Phil Weiser, a Democrat, said in a public statement Tuesday. Weiser is among a bipartisan group of AGs who are hinting at another multistate lawsuit against Google. “If we decide to file a complaint,” Weiser said, “We would file a motion to consolidate our case with the DOJ’s.”

Google calls the DOJ’s search-centric suit “deeply flawed.” The company notes in a blog post this week, “This lawsuit would do nothing to help consumers.”

What state lawyers asked about Google ad tech

State lawyers have been poking at Google’s complex ad tech tentacles for months. Ad auction mechanics, header bidding and third-party data access are among the myriad issues addressed in more than 130 detailed questions sent in June by the Office of the attorney general of Texas to Google parent company Alphabet. The civil investigative demand document was first obtained through a public records request by Politico.

Texas, which joined the DOJ complaint, has reportedly been among those leading a multistate coalition investigating Google since last year. The state has taken the lead on the ad tech related inquiry, according to Politico.

Here are a few of the Texas attorney general’s demands and queries sent to Alphabet:

“Identify and describe any advantages to any of Your AdTech Products arising from Your maintaining information that relates to past bidding behavior of bidders into an Ad Auction You conduct, including, but not limited to, Exchange Bidding and Open Bidding.”

“Describe in detail Your reasons, technical or otherwise, for prohibiting Advertisers from using third-party data providers to create target audiences.”

“Describe in detail all Attribution Models You make available to any Advertisers.”

“Youtube ads - Explain all of Your business justification(s) for removing the ability of non-Google DSPs to bid on YouTube Ad Inventory in January 2016.”

Here is a link to the full civil investigative demand.

Header bidding auctions come to a head

One area of market power for Google, some say, is reflected in the way it allegedly uses its dominant position to squelch competition in header bidding exchanges. Header bidding is a programmatic ad process said to increase ad revenue for publishers because it allows them to offer inventory to multiple ad exchanges at the same time, before making calls to their ad servers. This increases demand, arguably increasing ad prices paid to publishers.

Open bidding is Google’s version of header bidding, intended to ease the process for publishers. “Google has made it very easy for publishers to do open bidding compared to header bidding. So, publishers gravitate towards the easier route and Google wins,” says Ian Trider, vice-president of real-time bidding platform operations at Centro, a DSP.

“It doesn't have to be that way,” says Trider. “Google could make it easy for its publisher ad server to connect to exchanges server-to-server without Google handling the money. I believe Google chooses not to.”

The Texas AG’s letter seeks to find out why. It asks Google to, “State and explain Your rationale(s) for not allowing non-Google DSPs to bid directly into Open Bidding, and state the extent to which You have any plans to change this policy in the future.”

How marketers can prepare for the bigger fallout

Some like Mike Woosley, chief operating officer at Lotame, suggest Google’s dominance goes far beyond adtech. “Currently, in the digital media industry, Google has set itself up superbly to dominate not only just the vertical adtech chain, but also to dominate ownership of consumer identity,” he says. Indeed, Google today is among industry players jostling to guide development of a new standard for identifying consumers for ad targeting and measurement once cookies stop working.

Ultimately, whatever happens with Google’s ad systems, marketers will be best positioned to navigate those changes and the demise of cookies if they can rely on their own first-party data connections with consumers.

How can marketers ensure they’re prepared? As Cadi Jones, commercial director EMEA at Beeswax, notes here in The Drum that in order to ensure they have the first-party data they will need in the future, brands should “please figure out how to offer enticing incentives to both existing customers as well as new ones.”

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