The DOJ struck at the heart of the case this week; they exhibited how Google’s Search Advertising dominance harms advertisers. Largely relying on testimony from external sources, such as other industry players and expert witnesses, the DOJ pursued the wider implications of its technical focus on Search mechanics from Week 4.
One and Only
Professor Michael D. Whinston’s testimony from last week explained how Search Ads — the advertisements that appear on Google’s Search Engine Results Page (‘SERP’) — constitute their own separate market from other forms of advertising.[1] On Tuesday, the DOJ produced an email exchange with JP Morgan’s Chief Media Officer, Tracy-Ann Lim, that provides rich industry insight into this issue. An internal memo sent to Lim lists the benefits of Google’s product: ‘Search can drive acquisition’, she notes, ‘based on some of the strongest intent signals made available.’[2] The memo’s point — that Google Search catches customers just as they show interest in a particular topic or product — is one that Whinston had made in Court last week. But the significance of this exhibit is that it displays the industry’s awareness that Google’s advertising business offers unique opportunities for organisations.[3]
The uniqueness of Google’s product is a recurring motif for the DOJ; if the DOJ can convince the Court that advertisers have no other choice in the Search Ads market than to use Google, then it becomes hard for Google to deny their monopoly status. The JP Morgan memo illuminates this issue: it reveals that JP Morgan treats Google as a ‘core partner in search due to overwhelming market share’.[4] The document’s wording is telling — it attributes JP Morgan’s business with Google wholly, or at least primarily, to Google’s size instead of, for instance, the quality of its product. Ultimately, this exhibit confirms the industry opinion that it is unfeasible to advertise without Google and implies Google’s status as a gatekeeper of the digital advertising market via its Search Ads product.
The DOJ deepened its exploration of this theme on Thursday when it questioned a Columbia Business School Professor, Kinshuk Jerath, on Google’s advertising business. Jerath’s testimony bolstered the industry perspective above, as well as providing two new insights: firstly, Jerath noticed that Google’s Text Ads can ‘advertise virtually anything’ whereas other Search or Display Ads can ‘advertise only products.’[5] Jerath’s presentation elegantly discloses why Google’s business is unique: its Text Ads product offers marketing opportunities to non-sales related companies, unlike other channels of digital marketing. Jerath’s analysis provides yet more evidence of how irreplaceable Google is in the online advertising ecosystem.
Evidence of Harm
The other key insight in Jerath’s presentation concerns how ‘Google harms advertisers’.[6] Jerath argues that Google does this in two ways: it ‘restricts what advertisers can know about their own ad spend’ and it ‘controls the rules and influences the outcomes of its … Ad auctions’.[7] These are points that the DOJ has made in previous weeks. Jerath’s major contribution to this argument is that he has gathered evidence that Google themselves are aware that they are harming advertisers. They achieve this result, as an internal slide deck states, by ‘reduc[ing] control and transparency’ and making changes that result in ‘data loss’ for advertisers.[8] Jerath’s evidence indicates that Google is leveraging its market share and unique product to extract revenue unfairly from advertisers with no viable alternative service.
Jerath’s presentation also informed the Court that companies such as the Bank of America and Tinuiti have noticed the declining quality of Google’s advertising product.[9] The fact that these organisations have no recourse is clear evidence of the harmful effect of Google’s market dominance in Search Advertising. The DOJ’s testimony this week gets to the centre of the case: more than any other week in the trial, this week demonstrates why exactly legislative intervention against Google is needed — to combat the structural unfairness of Google’s advertising model.
[1] https://www.justice.gov/d9/2023-10/416945.pdf.
[2] https://www.justice.gov/d9/2023-10/417001.pdf, p. 2.
[3] Other listed benefits include the instantaneity with which companies can start, stop, or adapt their adverts based on how they perform; p. 2.
[4] https://www.justice.gov/d9/2023-10/417001.pdf, p. 3.
[5] https://www.justice.gov/d9/2023-10/417081.pdf, p. 11.
[6] https://www.justice.gov/d9/2023-10/417081.pdf, p. 1.
[7] https://www.justice.gov/d9/2023-10/417081.pdf, p. 34.
[8] https://www.justice.gov/d9/2023-10/417081.pdf, p. 36.
[9] https://www.justice.gov/d9/2023-10/417081.pdf, pp. 37–38.
Header image courtesy of Myriam Jesser on Unsplash (licensed for free via Unsplash Licence).