Google’s AdTech split offer was a half-baked distraction

Browser Neutrality is needed to protect the Open Web and journalism 

The Wall Street Journal broke the news on July 10 that Google has proposed seemingly significant concessions to settle US vs Google. These concessions seemed to be designed to ward off further cases against Google’s control over online ads, ad-tech and publishing that are being considered in the background by the US Department of Justice.  

However, reports in Competition Policy International indicate that Google’s attempt to ward off scrutiny have failed. The DOJ are gearing up to sue Google over antitrust violations that would indicate that Google’s AdTech business has harmed competition. 

Movement for an Open Web welcomes this decision from the DOJ, if they do indeed reject the offer and go ahead with further legal action. Precedent suggests Google’s offer to split off its ad business is not a meaningful concession, nor is it one that Google can be trusted to implement fully.   

  • The offer would presumably be made in the same way that AT&T offered to break itself up, with court oversight eventually putting in place a “Consent Decree”. BT’s competition undertakings that created Openreach as a separate line of business serves as another example.    
  • The break-up of AT&T and BT both addressed the problems of access and interoperability faced by downstream rivals. These issues arise for Google’s ad tech and publisher rivals now. For instance, freedom of the press online depends heavily on news sites’ freedom to contract directly with users and avoid the Google supply chain. This must be addressed by any adequate break up of Google’s business. 
  • AT&T and BT both created separate entities to police the discrimination boundary. Competition remedies worked by creating a substantive separation between different organisations, changing how they traded with each other: creating these boundaries between different technical systems and businesses enabled the authorities to police this “discrimination boundary”. Much though, then depends on where the boundaries are drawn. 

More than AdTech 

The current case against Google, brought by the DOJ on behalf of the United States, raises the issue of how Google prefers its own products in its search results and otherwise discriminates against rivals. Google’s self-promotion and display practices are legendary and have been the subject of EU decisions and record fines under EU antitrust law. Non-discrimination remedies are in place for the EU, but are widely considered ineffective. The DOJ will need to do more to make a real difference.  

If Google were offering to create boundary lines for business units around its commercial products, allowing greater scrutiny of the trading arrangements between such product units and its search engine, these concessions might be welcomed by rivals and concerned parties. 

SEC and Sarbanes-Oxley 

However, Google’s reported offer to the DOJ would have fallen well short of that. It apparently sees Google splitting its advertising business, which includes systems to auction and place ads on websites, into a separate company under the Alphabet corporate umbrella.

This doesn’t address the issues in the current case – or resolve any antitrust problems identified over ad tech and publishing to date. Until these business units report separately under Security and Exchange Commission (SEC) rules, and laws like Sarbanes-Oxley the internal structural change in meaningless. 

“It’s the Browser stupid” 

Google’s power over ad tech and the publishing supply chain comes from its Browser, as well as from controlling each step in the supply chain between user and publisher. Google has systemic conflicts of interest that arise at the levels of Browser, Ad Exchanges (DSPs and SSPs) and online ads markets whether for display or programmatic or otherwise. Separating out the ads business and putting everything into one place or only one element or step, such as the ad exchange business, leaves the scope for self-preference at browser level or any other level, simply unaddressed.   

Google’s control over online advertising is rooted in its multi-layered grip over access to the web, rooted primarily in control over the browser. Google and Apple are demonstrably bundling more and more functionality into the browser, utilising sign-in to centralise permissions around data collection, which then underpins Google’s data-driven AdTech systems. 

Many components of Google’s advertising technology are proposed to move into the browser. In the commitments agreed globally with the UK’s Competition and Markets Authority (CMA) Google acknowledge that the browser is part of this “Ads System”

Browser Neutrality  

What is needed Is a mechanism of putting an antitrust authority in an oversight position to police discrimination and ensure Browser Neutrality. That can be done and could build on the precedent of the CMA’s Privacy Sandbox decision, which puts CMA in an oversight role. DOJ could do something similar.  

Google has a track record of overpromising and under-delivering on its own deals. Handshakes on undertakings turn to sand over time.  

Google’s quarterly report, given to the UK Competition and Markets Authority as part of Google’s Privacy Sandbox Commitments is evidence of this; empty promises, and nothing but dust in the place of firm commitments to protect advertisers and publishers. When Google agrees something that might work on paper, it will continue to get away with as much as it can, regardless of its promises. Enforcement is essential. 

Crucially, this proposal does nothing to dent Google’s unsustainable and harmful threat to the Open Web. What matters for an Open Web is the freedom of the end user and the absence of platform control over authentication, identity, and access.  

Header image courtesy of Lauren Edvalson via Unsplash (Image licensed for free use under the Unsplash License)