Who will blink first in battle to topple Google adtech?

With US antitrust enforcers renewing their efforts this week to press for a forced sale of Google’s online ad business, publishers and rival adtech developers are watching closely.

Julia Tarver Wood, an attorney with the Justice Department’s antitrust division, said in her opening statement that making Google sell AdX was necessary to restore competition,

However, will the tech giant, which is notoriously adept at avoiding any sort of crackdown, escape again? Decision Marketing speaks to industry experts.

First up is Limelight Inc co-founder and CEO David Nelson, who says he feels quite ambivalent about the position Google finds itself in.

He argues that the main reason the company consistently finds itself in the firing line is because it has built a hugely successful business, yet it has also used its dominant position for its own benefit.

Nelson added: “The situation currently under scrutiny is a prime example of this, where Google’s ad server and Google’s ad exchange have a preferential relationship. This is clearly not right or defensible, and it’s notable that the DoJ has gone as far as to ask the judge presiding over the trial to order Google to sell its ad exchange. So we shall see.

“Whatever happens, we shouldn’t underestimate Google’s ability to a) come out of this relatively unscathed; and b) drag things out for so long by way of appeals that it has plenty of time to develop a replacement offering for anything it is ordered to dispose of.

Meanwhile, Particular Audience CEO and founder James Taylor commented: “The EU and the US both agree on the problem: Google has an inherent conflict of interest that tilts auctions run by Google’s publisher ad server toward its own exchange and buy‑side. This self-preferential treatment is anti-competitive.

“My view is that the market needs neutral pipes, but the fact that Google has made its ecosystem work in the best way it can (by controlling the components of a nascent, complex and distributed ecosystem) is a pragmatic effort not lost on me.”

For Revving chief executive Chris Pettit, however, the move says loud and clear that regulators in the US and the EU are growing weary of Google’s monopolistic approach to online advertising in particular, and adtech in general, and are seeking to level the playing field.

He believes this would make things fairer for smaller competitors, and, more importantly, offer consumers greater choice. However, in the US in particular, while regulators are keen on putting Google through the mill, they are less decisive in the action they take and he cites the recent DOJ’s ruling as a prime example.

Pettit explained: “Google could have been ordered to divest its Chrome browser and/or its Android operating system in an attempt to reduce its dominance. Instead, neither happened, with Google required only to share data with its competitors, and end the practice of paying substantial sums to secure exclusivity for its search and Chrome browsing services on handsets. So Google got to keep the core mechanics of its ad business intact.

“Limiting defaults and forcing data-sharing is cosmetic compared to the structural remedies that could have truly opened up the market. From an industry perspective, that means Google’s gravitational pull on ad budgets remains.

“Rivals may get more data, but without dismantling the bundling of search, browser, and mobile ecosystems, the imbalance persists. My view is that the regulators blinked. They acknowledged Google abused its dominance but stopped short of breaking the machinery that maintains it.”

However, Pettit reckons EU regulators seem more prepared to bare their teeth.

He concluded: “In their latest judgment, they gave Google 60 days to explain how they will change their practices to stop abusing their dominant position in online advertising.

“They also imposed a sizable fine – €2.9bn – which brings the total fines imposed on the company by the European Commission to €11.16bn since 2017. Loose change for Google, for sure, but a sign of the Commission’s impatience with the company all the same.”

Also published in: Decision Marketing