What the Google vs U.S. Government Case Means for Marketers
It’s here. The giant anti-trust case of the U.S. Government vs. Google.
We do not plan to cover the day-by-day minutia of the case, and — in fact will mostly ignore it from this day on until a verdict comes down.
But you might be hearing a lot about it from other sources, so we thought a primer on what it’s all about might be helpful.
Who’s suing and why?
The American Department of Justice, along with some states, is suing Google for what they say are violations of the Sherman Act, a U.S. Federal law prohibiting monopolistic business practices. [full lawsuit PDF]
In short, they say Google is “a monopoly gatekeeper for the internet” and uses anti-competitive tactics to corner the market on Internet searches and, by extension, the advertising business therein.
Specifically, prosecutors point to deals Google’s made with phone manufacturers to be the exclusive search engine on those phones — notably, Apple, which Google pays billions each year to remain as the default search on Safari.
But in the end, this is about money — ads, that is, and the case is expected to focus on not just organic search but also:
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Keyword-based text ads served beside organic search results
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General display ads served on the top of organic search results
For its part, Google is likely to say that competition is easy to access — just go to their competitors web sites.
As for paying to be the default search engine on phones, they’re expected to liken the practice to cereal makers paying supermarket chains to put their products at eye-level. (This is, of course, a little rich — I mean, have you seen the cereal aisle lately? It’s not like Raisin Bran takes up 90% of the shelving.)
I should note that there is a separate federal antitrust case alleging that Google’s ad tech stack is also in violation of the Sherman Act, but that case won’t start up until next year.
Why is this such a big deal?
Google made $163 billion off search ads last year — more than half of its parent company’s total annual revenue.
Historically, probably the closest comparison would be when Microsoft lost its anti-trust case in 1999. Back then, it was about web browsers. Netscape had been the dominant player, until Microsoft made Internet Explorer the default on its operating system, and cut exclusive deals with computer manufacturers for it to be the default on their hardware too.
The decision had massive impact. The tech industry had been riding a bubble. It was easy to get financing if you were in the web space. (I know, because I had one. I founded a dot com around that time, raised $3 million, and when the Microsoft decision came down, no funders wanted anything to do with us or the industry as a whole.)
What impact does this have on digital marketing?
Potentially, a lot.
In its latest annual report, Google warned that aggressive enforcement of competition laws could “increase our cost of doing business, make our products and services less useful, limit our ability to pursue certain business models” in a manner that could have “an adverse effect on our business.”
The downstream impact is potentially infinite.
Consider any professional whose marketing activity (both organic and paid-for) employs the use of keywords for search engine optimization, plus any website-owner that uses Google as their default search browser in their toolbar.
The slightest alteration to how Google operates will have a widely-felt ripple effect given that its share of the search engine market is in-and-around 90 percent.
Combine this with the fact that optimizing for/bidding on keywords to improve placement in search engine results is the core component of performance marketing, and it’s clear: the future of the marketing profession/practice hinges upon the outcome of this trial.
Digiday.com
How bad could it get for Google?
Google could be broken up.
The Sherman Act allows for the dismantlement of monopolies. The prosecutors haven’t yet said what recourse they’d want if they win.
It could also just end up in a bunch of fines — Google’s paid billions in various fines prior to this.
Or, of course, Google might win and consider that as approval to extend their business.
What’s the timeline?
The court case kicked off today; proceedings are expected to run into January at the least. But if previous cases are anything to go by, this will likely be years before there’s anything conclusive.
However, that’s no excuse for complacency, as prosecutors are keen to point out, this is a battle over the future of the internet and its environment for doing business for the decade to come.
Digiday
How do you think will it end?
Google will win (no monopoly) | Google will lose and have to pay fines | Google will lose and have to break up | They’ll settle before a ruling comes in
This Week’s Changes to Meta Ad Platform
Source: The Court Case Heard Around the (Marketing) World
