How Google Split Can Lower Your Online Shopping Bills

Experts say the remedies sought in the antitrust lawsuit could benefit not only advertisers and publishers but anyone targeted by online ads, with the U.S. Justice Department seeking to break up Google’s alleged monopoly on the ad technology market.

So far, the Justice Department has argued that through its acquisitions, Google is allegedly monopolizing the ad server market, taking a significant portion of each online ad sale by bundling buy-side and sell-side products. By foreclosing on publishers to use its sell-side platform to access high advertiser demand, Google is also allegedly foreclosing on rivals, forcing advertisers into a corner and then making it harder for publishers to switch platforms.

The Justice Department argued that this practice was allegedly designed to allow Google to charge higher “monopoly” fees, which allegedly led to the closure of some publishers and increased costs for advertisers.

But while the harm to publishers and advertisers has been detailed, there has been less talk about the seemingly dire consequences for consumers, perhaps harmed by the alleged monopoly. These harms include higher costs of goods, reduced privacy, and increasingly poor quality advertising, which often bombards their screens with products no one wants.

As Tech Oversight’s Sacha Haworth explained during a press conference on Thursday, where experts closely monitoring the trial shared their insights, Google allegedly imposed a “Google tax” on the prices of “everyday goods we buy,” inflating the prices of online ads by as much as 5 to 10 percent.

“In terms of lowering costs for families,” Haworth said, “Google has overcharged advertisers and publishers by almost $2 billion. That’s just in the last four years. That’s raised the price of advertising, it’s raised the cost of doing business, and of course we pass those costs on to us when we buy things online.”

While it’s unclear whether destroying Google’s alleged monopoly would translate into savings for consumers, Elise Phillips, an antitrust and privacy policy adviser at Public Knowledge, pointed to other benefits if the Justice Department wins.

She suggested that Google’s behavior had reduced innovation, which had “negatively” affected “the quality diversity and even relevance of ads that consumers tend to see.”

If Google’s ad tech were to be broken up and behavioral solutions were to be found, greater competition could give consumers more control over how their personal data is used in targeted ads, Phillips suggested, and ultimately lead to a future where everyone gets higher-quality ads.

That could happen if, instead of Google’s dominant online advertising model, less intrusive ad-targeting models could be more widely adopted, experts have suggested. That could improve privacy and make online ads less scary after The New York Times called it a “junk ad epidemic” last year.

Experts suggest the concept is based on the idea that if small businesses and publishers benefit from potentially lower costs, higher revenues and more options, consumers may start to see a wider range of higher-quality ads online.

Karina Montoya, a policy analyst at the Open Markets Institute, said better advertising models “already exist,” such as “conceptual advertising,” which uses signals that, unlike Google’s ad targeting, don’t rely on “giant, massive data sets that collect every single thing we do across all our devices and don’t ask for our consent.”

But any emerging advertising models are seemingly “crushed and flattened by this dominant business model that is really emerging” because of Google’s tight grip on the ad tech markets targeted by the Justice Department, Montoya said. These include markets for “publisher ad servers, advertiser ad networks and ad exchanges that combine the two,” Reuters reported.

In an extreme case, weakening Google’s control over the online advertising industry could even “revolutionize the internet,” Haworth suggested.

One theory is that increased publisher revenue would also benefit consumers as more information could become available on the open web — because less content would potentially get stuck behind paid content as desperate publishers sought ways to make up for lost advertising revenue.

Montoya — who is also a reporter for the Center for Journalism and Freedom, which tracks how media can thrive in today’s digital economy — noted that publishers that rely on reader funding through subscriptions or donations are not sustainable if society wants to “have an open free market where everyone can access the information they deserve and have the right to access.” The Justice Department argues that by reducing Google’s control, publishers would be more financially stable, and Montoya hopes the public is starting to understand how that can benefit the open web.

“The process really allows the public to see the full picture of Google’s pattern of retaliatory behavior, really just to protect its monopoly position,” Montoya sad. “This idea that innovation and ways to monetize journalistic content have to come solely from Google is wrong, and that’s their real defense.”