This is actually pretty explosive news. Several of the ongoing antitrust cases involving the tech giants would require a more relaxed definition than the current antitrust standard which necessitates linking direct consumer harm. This standard was established by a somewhat radical pro-free market court decision that reversed an earlier interpretation that viewed monopolies in and of themselves as a condition subject to antitrust litigation (without the direct consumer harm piece). The current definition poses an almost insurmountable challenge for regulators as all companies need to do in order to avoid meeting the statutory requirements for antitrust is to refrain from colluding and/or abusing their market dominant position (engaging in anti-competitive practices). It seems like Google and Facebook crossed that line in a pretty blatant way which is quite shocking considering they are fully aware of the consequences. They opened themselves up with this one in a way that could lead to their undoing. Crazy stuff.
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> Google and Facebook crossed that line in a pretty blatant way which is quite shocking considering they are fully aware of the consequences
If they're stupid enough to do this there's a lot more candy in the sofa.
More than you know. Break down the ad auction, DFP, ad exchange, Adsense, and see what insanity they have been calling business as usual. There are so many ways they’ve stole from the rest of the ad business with monopoly practices. This goes back to Atlas and why there is no such thing as a pure play ad server. Header bidding was the last best hope for democracy in the ad marketplace, but has killed the mobile webs batteries, bandwidth, and paved the way for AMP, which is another de facto ad monopoly.
I ran ad ops at a header bidding outfit serving in the 10 figure impressions each month. You’d see pubs be ecstatic to have 30% of their ad revenue be non-Google, with most closer to 90-100% sold, served, and tracked by Google.
They have the world’s most complete record of the thoughts of humanity for the past 20 years. They sell audiences of all ages to the highest bidder, take an auction fee, fees for ad placement tools, fees for ad selling tools, exchange fees, data fees, platform fees, mandatory minimums on giant contracts, and virtually no support. It’s a monopoly over billions of dollars and trillions of minutes of people’s time. And it’s one hell of an AI.
Can you explain how the public is harmed? I (think) I get the affect on various players in the ad ecosystem.
Can anyone quantify the harm to the public?
Three ways that I can think of quickly:
1. Ads cost more which raises the cost of doing business which raises the cost of goods.
2. It also makes certain borderline businesses infeasible -- there would be a whole class of businesses that don't/can't exist because they become unprofitable if you have to pay the ad monopoly/duopoly piper on top of normal expenses.
3. You could also argue that FB's continued dominance is another societal harm stemming directly from the alleged actions. If there wasn't an ad cartel, it would be easier to start new ad-based social media companies. (Wouldn't it be crazy if Google+ being neglected and then shutdown was a part of the negotiations between Google and FB?)
Lots of presumptions in the above, but I think a strong case could be made for each.
This is 100% true -> (Wouldn't it be crazy if Google+ being neglected and then shutdown was a part of the negotiations between Google and FB?)
Same for
Amazon closing down A9 search
Google buying up Affiliate Networks and closing one down and basically banning affiliate from most of Google Search and
doing @#$#$-all with Google Shopping
100% Division between
Amazon - shopping Google - search Facebook - social
with outward illusion of 'rivalry'
Bezos is 4th angel investor in Google
Qunicy Jones in an interview says he used to have a weekly dinner with
Elon Musk, Google founders, Bezos
It's Qunicy Jones so no idea how reliable. But wouldn't that be interesting - if Google and Amazon founders were doing dinner every week or every other week
Actually you just kind of convinced me of the opposite -- that there was nothing nefarious with Google+. Clearly these companies have a track record of getting out of non-core businesses where they don't have expertise and/or don't have much to gain.
Google buying up affiliate networks and shutting them down is just plain consolidation of monopoly -- not conspiracy to divide up the market like the other actions. (It still deserves antitrust scrutiny, but for wholly different reasons.)
And weekly or bi-weekly dinners? Conspirators go to great lengths to have legitimate pretenses for any meetings. Trade shows are/were notorious for where these cartels get business done because everyone has a legitimate interest to be there. You also want plausible deniability.
Because more competition in the ad space is invariably better for consumers. The alleged practices at play are illegal because they are known to harm consumers. And this is sufficient to demonstrate harm. For example, collusion is illegal not because someone necessarily sues and says “I was harmed by this” but because collusion invariably harms consumers. That’s the whole motivation behind collusion/price setting. Seems clear as day to me though I inquired with my friend who works in antitrust litigation and this was the response:
“There’s the broader principal that if they’re setting prices illegally they may not be harming consumers right now but they certainly could. Second, consumers are hurt when innovation/competition is curbed, and that is what they allege the deal’s purpose is. The bottom line is that if there were illegal deals and they can prove there were, those agreements are per se violations and you’re not really looking at consumer harm. This is what the case is alleging.”
The brief actually sums this up really well. The claims start at p. 100, which is where they allege harms but they provide good explanations throughout.
Edit: Note about the the brief.
The thing is, the “consumers” of the ad space are the advertisers, not end-users. They’re the product
So monopolistic practices will harm the consumer (advertisers), but do they really harm end-users? Does a monopoly in farming harm the cows?
The end users buy the products of the advertisers. In a monopoly ads cost more and to make a profit advertisers have to increase their product prices. In turn the users pay higher prices for the products that are being advertised.
TL;DR Businesses just pass these costs on to their consumers.
Businesses have somewhat standard target gross margins, customer acquisition costs (CAC), LTV:CAC ratio, etc. and will determine pricing based on multiples of these variables. Ad spend is often a huge component of CAC and this directly feeds into what companies need to charge their customers in order to use their products. The assumption that businesses will just eat a higher cost as sort of consumer benefactors is quite naive. I can assure you they won’t.
> Can anyone quantify the harm to the public?
Drive down ad rates for non-google content, which severely hurt other digital publishers, like news sites. This made it basically unsustainable for them to survive on advertising. Thus, hurt local reporting and investigation, which in turn allows corruption and ineffective government, eventually hurting democracy.
The business has to pay more to acquire customers, which drives up the cost of goods. Indirectly the consumer pays in mobile bandwidth costs, and publishers are forced to show ever-more ad units, refresh every 30 seconds, paginate articles, or add content recommendations, all because AdTech takes 85% of the ad spend that use to flow more directly between publishers and advertisers. Much of that went to the cost of staffing a sales team, but those folks were doing human review on campaigns, so ad quality was high and fraud was low. With unlimited digital ad variations, ad networks have to police a mountain of potential bad ads, which can be directly malicious to the user.
I can spin up 1000 banners and text ads, but only spend a dollar. See the problem? They all still need review. Instead, GOOG relies upon AI and user reports, which they promptly ignore. Meanwhile, they serve up so many mobile redirects that publishers have to pay yet another vendor for protection against the crap Google doesn't vet. As a publisher I'm not really interested in showing my audience ads that automatically redirect them away from my content and to a scam $500 Walmart Gift Card landing page. Yet, if I want to have access to Google demand, I have to take the bad with the good. What choice is there? Exist and use Google, or pass on 60-90% of revenue while competing for the same audience?
As an advertiser I have to count on Google's reporting to tell me if I'm making positive ROI and they are constantly finding new ways to convince me that they made the sale. They bill for ads that were never seen and clicks that went to nowhere. Occasionally you'll see a discount on your bill for "Invalid Clicks" but you'll never see anything auditable about it. If I don't police my site list, I might end up funding websites run by terrorists and/or money launderers. Honestly how many US citizens who are shopping for cars do so on .ru domains? If you're not vigilant, that will be 20%+ of your ad spend. Yet, if not Google or Facebook, where can I reach a relevant, large audience with a small and variable ad spend? Not with DSPs, not with agencies, not with direct ad buys.
One has to have a theory of (public) harm. There are a bunch of them from a legal perspective, and maybe they will carry the day. They don't necessarily make sense from a non-legal colloquial perspective.
From a non-legal perspective, one of the big harms (I would argue) is in the destruction of the business model for small ad-supported publishers. Google was taking 80% of money that should have gone to them, and digital and physical publishers (like local newspapers) have had a mass extinction.
That said, out of the ashes, rises the phoenix. Substack and other subscription models owe their opportunity to Google's monopoly, and in many ways they're the mammals in this ecosystem of dying dinosaurs.
> Google was taking 80% of money that should have gone to them
This seems to presuppose an alternate universe in which Google doesn’t exist but ad revenue is the same?
No, a universe in which Google exists but wasn't committing fraud as monopolistic mobster middleman, handling both delivery and measurement of delivery. Google did and does what any mobster does- claim the vast majority of the value and let a trickle flow back to the producer, striking deals ordinarily understood to be illegal to maintain their position, while creating reports for producers that conveyed a false view of their role in the middle. Few producers survive with the mob as their distribution.
This affects the whole online ad market, not just Google's competitors. That's a whole lot of "the public" that's directly affected.
How do you quantify it? I don't know, how about we look at how much money Google is making?
Is every dollar that Google earns a dollar of harm to the public?
Why can't it be? Every dollar of harm translates to more than a dollar of knock-on effects
> It seems like Google and Facebook crossed that line in a pretty blatant way
Well, I mean, everything always seems blatant when you read the complaint in a lawsuit by itself.
OTOH, there's a reason that the legal system doesn't just take the complaint and decide based on that.
I suspect they regard themself as 'too big to fail', in the sense that they might think that the practical implications of such a breakup would deter anyone from even considering this scenario.
Interesting, I have never heard this argument before. I don’t think there is a case to be made that the individual entities that make up Google or Facebook couldn’t operate independently. Google Search, G Suite, Google Cloud Platform, Facebook, Instagram, WhatsApp, etc. are all viable businesses in their own right. Many of them would still even qualify as “tech giants” eg WhatsApp is absolutely enormous with 2B monthly active users. In other words, a breakup wouldn’t result in failure and therefore wouldn’t satisfy the too big to fail criteria.
At least for Google, it would be interesting how much technical effort that would require. I don't work at Google, but lets say some large subset of their systems runs on Borg. The cost of separating out GCP and Gmail for example could be quite large. Not that that's necessarily a legal defense, but the technical ramifications of a breakup are interesting.
Dont you run the risk of creating a super monopoly if Gmail, Maps, Youtube etc that are split dont survive. The only choice is Apple and maybe thats why they are so keen on this, because the govt hands them ultimate control
Antitrust does not discriminate against a single company. If Apple is in violation of antitrust regulations either today or at some point in the future, regardless of how they got there, they would be subject to the same legal action. So no, theoretically speaking and practically speaking, this is not a risk.
That's not how it works in practice though. There's no US legal action against Apple, they can reap Billions and billions of dollars with their own monopoly before any action reaches them after Google and Facebook are crippled.
This is the big issue with targeted anti trust vs. industry wide regulation.
The government isn't suing apple for antitrust because someone else decided to do it for them: https://www.washingtonpost.com/technology/2020/12/10/cydia-a...
The timing of this case, the Google case, and the FTC facebook investigation is interesting.
there's this related thread by Cory Doctorow from last week
https://mobile.twitter.com/doctorow/status/13368328196753162...
The case in the US would be around the market power of Facebook, Google and Amazon. That vertical merger case is being run by the Department of Justice’s antitrust division. The European Commission is also investigating the same three companies under its EU Merger Regulation rules. The EU competition enforcer has opened a case against Google for some e-commerce practices.
Yes, They also do a lot more than this
stuff like
astroturfing
click fraud
fake submissions on forms
etc
They basically operate completely recklessly
We are getting a lot of attacks from Google. I took screenshots just today of them doing fake submissions and they don't even hide it. From Google servers
*
Basically, their modus operandi is
A) Silent Agreement between Amazon, Google, Facebook and a few other companies (not sure which) to divide internet among themselves
B) Use any and all method to slow down any company growing fast
Usually this is 'plausible deniability' methods such as removing apps from app stores, kicking you off your payment processor, dropping you in organic search, shifting your adwords to 90% fake clicks, etc
C) If above methods don't work then they start using illegal methods i.e.
modifying search results when people search for you hacking attacks using gmail to hide your emails to customers and/or not deliver your invoices to new customers click fraud on other ad networks (Bing, etc) fake submissions
Contrast the HUGE number of enterprise side and B2B companies that are going public
now compare with how few customer to business companies are doing the same
*
It's not random
any customer facing company that is begining to do well has to face
Google disappearing them from Search Facebook disappearing them from Facebook and Instagram attacks from a few other Silicon Valley Companies
There is going to be A LOT of candy in the sofa
It's going to be Snowden level stuff
There will be a list of
Top 10,000 companies to kill off
and also
Top 500 threats
And there will be a playbook of all the methods to use to wipe them out
There will be even totally crazy stuff like
sending spy employees Trojen Horse VC Investments
etc