"Google demanded that it represent the buy-side, where it extracted one fee, as well as the sell-side, where it extracted a second fee, and it also forced transactions to clear in its own ad network and ad exchange, where it extracted even more fees," an antitrust lawsuit filed by sixteen US states led by Texas against Google reads. The lawsuit alleges that Google unlawfully monopolised online advertising. In part 1 we explored how online advertising works and Google's monopoly power in various markets in online advertising. In this post we will dive into the alleged anticompetitive conduct Google engaged in to acquire and maintain its monopoly power, specifically the unlawful tying of Google's various products. You can read other parts of this series here. Overview of how online advertising works Online advertising for display ads (e.g. image-based ads) relies on three main components: Ad servers: The inventory management software that helps publishers sell their ad inventory. Publishers are websites with ad spaces such as news websites and blogs. Ad buying tools: The software that advertisers use to buy display inventory from publishers. Ad marketplaces: The electronic marketplaces where buyers and sellers of display ads are matched. Buyers (advertisers) are represented by their ad buying tool whereas sellers (publishers) are represented by their ad server. There are two main types of marketplaces: ad exchanges and ad networks. For more on how the online advertising market works, read our explainer here. How Google forces publishers to use Google’s ad server and trade in Google’s ad exchange? Prior to anti-competitive practices, Google was…
Google antitrust lawsuit part 2: How Google unlawfully ties its various products in online advertising
A deep dive into Google’s alleged anticompetitive conduct including the tying of its ad server and ad exchange.
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