It’s never a slow week in the land of ad tech, including in the courthouse.
Earlier this week, federal judge Leonie Brinkema ruled that Google will not have to break up its advertising business. That’s after she ruled in April that the company operates a monopoly in the supply-side platform and ad server markets.
Meanwhile, Amazon faces a lawsuit from the Federal Trade Commission (FTC) alleging that it made advertisers pay more than was necessary for Sponsored Product ads on its flagship ecommerce site.
As for Google, this isn’t its first rodeo with avoiding structural remedies. Google was found guilty of running an online search monopoly two years ago, but was allowed to keep ownership of its Chrome browser, despite the Department of Justice requesting that Google be forced to sell it.
“This is the second time that the federal government has found Google guilty of operating a monopoly but declined to take meaningful action to break up that monopoly,” said Anthony Vargas, AdExchanger’s managing editor, on this week’s episode of The Big Story.
Still, the fallout from Google’s ad tech antitrust trial isn’t completely over just yet. Google will have to implement behavioral remedies meant to address the anticompetitive nature of its ad business. But those remedies are still to be determined.
On the other side of the courthouse, Amazon is fighting a legal battle of its own.
It now faces a lawsuit from the FTC and 22 state attorneys general accusing Amazon of operating a fake bidder – or, in Amazon’s preferred terms, a “soft reserve price” – that placed bids much closer to the winning bidder’s price. Which means advertisers were paying nearly their full bid instead of one cent more than the second-highest bid, as typical second-price auction rules dictate.
That alleged auction manipulation made advertisers pay tens of billions of dollars more than they should have for Sponsored Product placements on Amazon, the FTC claims. By the FTC’s count, this tactic netted Amazon about $20 billion in revenue since 2019.
Although it’s still unclear what the consequences for Google and Amazon will be, it’s clear that the federal government and the ad tech industry both expect Big Tech companies to act with transparency and fairness.
But will they? Or won’t they?
Also in this episode: We discuss OpenAI’s annualized revenue announcement and what media buyers need to see from OpenAI before they invest more ad dollars into ChatGPT. We also dig into The Trade Desk’s Kokai Zuma update as a pulse check on programmatic platforms’ investment in agentic AI.
