Two Simple Facts that Lay Waste to the Antitrust Case Against Google

Without Actually Evidence of Consumer Harm, Antitrust Enforcers Are Looking at the Wrong Industry

Carl Szabo
Feb 10 · 4 min read

State attorneys general and the U.S. Department of Justice (DoJ) are trying desperately to validate their hunch that Google is engaging in anti-competitive practices. Like a car mechanic searching for a non-serious problem he can charge you for fixing, these law enforcement agencies now have to justify their rhetoric in starting a major crusade against one of America’s world-leading tech firms.

A new effort to find antitrust violations in the digital advertising market is the latest gambit in this Google investigation. The AGs and DOJ say Google is the largest online advertising platform and use that fact alone as justification for breakup. But even these facts don’t support their beliefs.

Antitrust enforcement requires evidence of (1) market power that (2) causes consumer harm.

A Lack of Market Power

With so many choices among advertising platforms, ad exchanges, and ad networks, the businesses and other who advertise online have lots of choices. Competition is robust, and it’s growing as new competitors create advertising opportunities on devices and services.

No Consumer Harm

Online advertising services operate two-sided markets since they are attracting audience on one side and advertisers on the other. Audiences don’t pay for the services they receive. The paying “consumer” is the business, organization, or individual who’s buying the ads — the gutter repair guy or a mom making custom jewelry in her home.

Never before have small businesses had such access to finely-targeted advertising at low cost. Online marketplaces like Google and Facebook have opened up advertising to any and every small business.

Think back to when newspapers, radio, and TV were the only places to do advertising. Those placements were too expensive for smaller businesses and it was too hard to know whether the ads were reaching the right people.

Now small businesses, for only ten dollars, can reach hundreds of potential customers in the targeted area or demographic.

  • 58% of Americans, including 73% of 18–24 year olds, say online platforms helped them discover a small business they had not previously known about.

And while the advertiser learns about the effectiveness of their ads within moments, they aren’t provided the identity of ad viewers by the ad service.

America’s small businesses are the “consumers” in any analysis of anti-competitive practices. But even if antitrust investigators wanted to examine the audience side of these two-sided markets, they’ll find that things have never been more competitive than today — thanks to services like Google, Facebook, Amazon, and Twitter.

That’s going to be a disappointment to AGs and DoJ officials, who hope their antitrust actions against Google and Facebook will appeal to America’s online consumers. But here, too, the facts show otherwise.

Americans See the Robust Competition in the Market, Even if Regulators Don’t

Today, thanks to the internet, shoppers have access to a profusion of products and providers. No longer limited to just nearby stores, the internet enables shoppers to buy from thousands of sellers across the country. Websites such as Slickdeals help buyers find active discounts. Services such as Honey do real-time price comparison and find coupons at checkout. Today, Americans know they can easily find desired products and services at the lowest prices.

The experience of the last twenty years should convince antitrust investigators that online ad markets are ferociously competitive and dynamic.

Just twenty years ago, Fortune magazine featured the article, How Yahoo! Won the Search Wars. In 2006, MySpace had more daily visitors than Google. And we can look back with amusement at antitrust concerns about the Aol-TimeWarner merger and investigations of Blockbuster Video merging with Hollywood Video.

AGs and DOJ should dismiss their crusade against Google and move on to real concerns about competition.

  • Only 5% of Americans say the government should most focus its anti-competitive enforcement on tech platforms.
  • Actually, 29% say government should focus anti-competitive enforcement on pharmaceutical companies,
  • With 11% saying focus should be on electricity and gas industries.

The longer this antitrust crusade against Google and Facebook continues, the more DOJ and AGs will lose their respect and relevance. Americans and American businesses see a vast array of choices when they go online for services and shopping, so they know that competition is not a problem, and certainly not one government needs to solve.

NetChoice

The home on Medium for all things NetChoice. Here, we publish opinion pieces on issues that we cover — fighting to break down barriers to e-commerce.

Carl Szabo

Written by

Tech and Privacy Attorney specializing in federal, state, and international legislation and tech issues.

NetChoice

NetChoice

The home on Medium for all things NetChoice. Here, we publish opinion pieces on issues that we cover — fighting to break down barriers to e-commerce.

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