Google is illegally monopolizing online advertising tech, judge rules

Google isn't a monopoly in the Standard Oil sense of the term. Its ad revenue is big because it occupies so much user attention. I actually think many suggested remedies would actually make Google more profitable.

For example, prohibiting Apple-Style search deals would mean that Google gets a smaller amount of traffic, but that traffic would come with zero cost. That could end up being more profitable. A similar argument applies to Chrome or any other customer acquisition vehicle.

The real barriers to making Google competitive are fixable but require a different sort of regulation outside of antitrust.

I mean it wouldn't make sense for it to be more profitable for google if there were no search deals, since otherwise they would just cancel the deal themselves. Clearly they see long term value in blocking out competition even at that high of a price

> Google isn’t a monopoly in the Standard Oil sense of the term.

Aren’t they? It doesn’t sound like those two interpretations are mutually exclusive.

Google can't cancel it right now because then otherwise Bing would bid for it. Antitrust rules which prevented anyone from bidding it would protect against this.

A historical parallel is when tobacco advertising was banned, and cigarette companies because more profitable. Advertising greatly affected which cigarettes people smoked but had a smaller (though still real) impact on whether they smoked. So the companies kept most of the revenue with none of the advertising cost.

It would make sense if Apple decided to still have Google be their default, even without the payment. Not sure how likely that is though.

It depends on the what the browsers end up doing. If they just surface a select your search engine dialog during set up, most people will just select google and nothing will have changed besides the cost. If they set a non-google search engine by default, they will lose ad revenue because of people not bothering to change the default.

In the sense of the Sherman Act and similar legislation, monopolies exist in the sense of having exclusive control over some supply and raising prices against consumers.

This isn't what Google does, they generally lower prices for consumers and the competition is only a click away.

> Antitrust rules which prevented anyone from bidding it would protect against this.

why would anti-trust rules prevent _anyone_ from bidding? Apple can sell their browser search, just like mozilla can sell firefox search. And anyone with a browser could do the same. Unless the anti-trust rules somehow become so overarching that the selling of space for advertising becomes illegal?

Depends on the default search engine. Many people went of their way to download a web browser that wasn't Internet Explorer for many years even though IE was the default.

If the default search were randomly assigned and Google investors were nefarious the investors (not Alphabet) could simply help launch 30 different subpar search engines. Then if a user landed on one of those as a default search engine: the user would switch to Google.

What realistic alternatives are there in the mobile app ads space that aren’t geared towards games?

I’m genuinely curious because some apps can be hard to monetize in any other way.

I think it would be a good move to prevent browser deals. There is no reality in which the winner is Firefox, Kagi or DDG - it will always be Google or Bing. That's clearly anticompetitive - it locks the other browsers out of a major share of the market.

> In the sense of the Sherman Act [...]

> This isn't what Google does [...]

Odd, then, that this is the second case within a year where Google has been found, in fact, to have violated the Sherman Act. This suggests that your description of what the Sherman Act means, or of what Google does (or both) are wrong in significant ways.

The consumer harm standard is an outgrowth of the work of Robert Bork, who was Solicitor General for Nixon and Ford, respectively.

It was not established by legislation but rather as a matter of conservative legal doctrine. Before Bork the commonly held evaluation standard was based on the Rule Of Reason.

The Sherman Antitrust Act didn’t establish any guidelines for how it was suppose to be interpreted (the whole thing is only a few pages in length) and the Clayton Act only expanded upon what actions could be considered as part of an Anti trust case.

The consumer welfare standard has no basis in legislation, only legal doctrine.

It’s unfortunate we haven’t codified anything more concrete, as the consumer welfare standard has a number of flaws, as admittedly did prior legal doctrine.

The Rule of Reason was more rigorous, though not flawless, as far as market competition goes though, my view is it is a better legal doctrine overall and could be updated to better address todays and future concerns, particularly with digital goods and technology.

The real reason that tobacco advertising ended on television is the fairness doctrine.

After the FCC agreed that the fairness doctrine applied here every station was required to run one PSA for every 10 tobacco ads. The industry, realizing that nobody would stop advertising without being forced to, actually lobbied Congress for the passage of the law banning it. One reason total revenue went up was that stations were no longer required to run anti-smoking PSAs.

If you're arguing we should split Chrome development from Google then I'm 100% with you there.

The consumer of the ad platform is the advertiser, not the person clicking the ad. Major advertisers either play ball with Google or their ads don't get seen in search. Doesn't seem very different to Standard Oil controlling who got access to refineries.

Sure, but I'm arguing Apple shouldn't be allowed to sell "default browser" status on iOS. Show the customer a randomized list and let them choose. Google will probably still dominate, but it won't be because they paid to.

It would be great to separate the search index/engine from the ads and allow other search portals to pay for the index and choose how to monetize.

If google actually went about organizing the worlds information, that would be wonderful.

Google could argue (correctly?) that if split, Chrome couldn't exist without browser deals?

You highlight some genuine points of difficulty for antitrust enforcers.

If the rules were targeted at Google only then Google's lawyers would argue this is unequal application of the law. Even if the courts rejected Google's argument there'd be a real risk end up with exactly the same situation but with Bing in a couple of years time as they become the default search on every device / browser.

If "pay for default" deals were banned altogether then Firefox might be seriously hurt, which isn't exactly good for the competitive tech ecosystem.

87% of Googles revenue in 2023 was advertising. $265 billion. They hold more than 80% market dominance in all markets they compete in.

https://www.statista.com/statistics/266249/advertising-reven...

Market share and market dominance are very sensitive to how you define the market.

Facebook has >$100B ad revenue [1]. Does that compete with Google? Reasonable people can probably disagree about exactly how much so. From an advertisers perspective they compete for the same marketing budget, but from a consumers point of view they feel like different products.

Things get even more tricky when we compare YouTube to TikTok, or Amazon search result ads to Google search ads.

https://www.statista.com/statistics/544001/facebooks-adverti...

I judge this Chicago-school-pushed shift in antitrust enforcement so bad that I usually mark it out as the first noteworthy step on our current thrust toward authoritarianism.

The market consolidation we've seen since, and the concentration of power, have been absolute poison for both liberal democracy and the good aspects of capitalism, so far as contributing to the common good.

That's belied by the fact that Chromium exists, and I speculate they spun up Chromium in case they were ordered to break up.

The engine is also used in several other web browsers, many of which do not have the clout to survive solely on ads. Yet another reason Google claiming this is absurd.

A simple test is if you got rid of a product, what would customers use as a direct replacement? Those competitor products, the product you got rid of plus the customers of those products, are a market.

Here, the products are Google Ad Exchange (Doubleclick Ad Exchange) and the Publisher Ad Server (DoubleClick for Publishers) which are now Google Ad Manager and the customers are publishers selling space for ads on their websites.

Website publishers can't really use Facebook as a direct replacement, so they're not in the same market.

Why shouldn't Apple be allowed to do that? They're not a monopolist adjudicated to have been using their market power to cause harm to others.

Context is important.