Yahoo Finance Google Leveraged User Data to Dominate Online Advertising: Lawsuit
Online Travel This Week
An antitrust lawsuit that the U.S. Department of Justice and eight states filed Tuesday against Google details how its rigorous use of consumer data helped enable the company to dominate all sides of the online advertising industry.
The word “travel” doesn’t appear in the 153-page lawsuit (embedded below), but travel advertisers from Booking.com to Expedia and Marriott, as well as just-born startups, are well aware there is an unofficial Google “tax” on their books, namely the added cost they often need to pay to Google to find customers.
In fact, the lawsuit said, “Google keeps at least thirty cents — and sometimes far more— of each advertising dollar flowing from advertisers to website publishers through Google’s ad tech tools,” for example.
Travelers and other consumers are undoubtably not as aware how Google uses their data to reap billions of dollars in profits and, the lawsuit alleges, wield a near-monopoly or monopoly in both the advertiser and publisher side — the websites that show the ads — of the advertising industry.
Sure, Google is quick to point out that it “doesn’t sell your personal information,” and individuals can “control what data and activity can be used to personalize ads.”
One might assume — wrongly — that if Google doesn’t sell your personal data, it isn’t making money off it. Few things can be further from the truth. Google doesn’t have to explicitly sell personal information because it shares certain user information with advertisers as a foundation of its advertising business.
The lawsuit notes that starting in 2016, Google began combining data from its various properties, such as Search, YouTube and Gmail, to create “a single user identification that proved invaluable to Google’s efforts to build and maintain its monopoly across the ad tech industry. Over time, Google used this unique trove of data to supercharge the ability of Google’s buying tools [which connect advertisers to ad networks] to target advertising to particular users in ways no one else in the industry could absent the acquisition of monopoly — or at least dominant — positions in adjacent markets such as Search.”
This is the fifth U.S.-based antitrust lawsuit filed against Google, and the first leveled against Google during the Biden presidency. Several target Google’s advertising business, and this one seeks damages, calls on Google to cease its allegedly monopolistic practices, and to divest parts of its advertising business.
The lawsuit likens Google’s market position in the online advertising business to Citibank or Goldman Sachs owning the New York Stock Exchange.
In a blog post, Google argued that the U.S. online advertising business has plenty of competition from the likes of Meta, Amazon, and TikTok, for example.
“Government shouldn’t pick winners and losers in a competitive industry,” Google stated.
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