The DoJ managed to get on record that the cost of Google ads rose in secret.
- Google’s Vice President for Advertising Products testified about the company’s quiet price increases in ad auctions.
- Despite regulatory efforts, key tech players like Google and Meta maintain significant market shares, raising questions about the balance of power.
As the second week of the U.S. v. Google antitrust trial unfolds, the U.S. Department of Justice (DoJ) takes a magnifying glass to the tech giant’s advertising revenues.
The U.S. DoJ has accused Google of maintaining an unlawful monopoly, particularly in the domain of online advertising. Jerry Dischler, Vice President for Google’s advertising products, testified that the tech giant quietly raised the cost of google ads with no repercussions.
According to the testimony, Google has been making subtle changes to its advertising auctions, often leading to price increases of up to 5%. To make matters worse, advertisers were not notified of these changes. Dischler admitted under oath, “We tend not to tell advertisers about pricing changes.”
Dischler also admitted that that was done to meet Google’s CFO Ruth Porat’s quarterly revenue targets. Dischler’s email from May 2019 attested to the company’s determination to meet these revenue goals, even if it meant unconventional methods, stating, “I care more about revenue than the average person.”
Truth be told, the U.S. has every right to scrutinize Google’s pricing practices. Turns out over 60% of Google’s total revenue is derived from search ads, totaling over $100 billion in 2020.
And the U.S. is not the only region reeling from Google’s blatant dominance and unrestraint “ambitions.” If I could point your attention to the other side of the Atlantic. Big Tech companies, including Google, are the reason the EU has a Digital Markets Act (DMA) now. it’s legislation imposing a number of obligations on what the EU has designated as gatekeepers. All in the name of closing Pandora’s box.
But will they be able to do so? As things stand, the power is concentrated in the hands of key tech players and the rest only eat the crumbs that fall off the table. In fact, Google has a market share of over 90% in the search engine market, and Meta has a market share of over 70% in the social media market.
Should lawmakers have anticipated the damage back when the .com bubble first burst? When will the fact that Google and other Big Tech giants hold more power and influence than major regulatory bodies like the EU?
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