Google Executive Gets Grilling on Capitol Hill

Google Executive Gets Grilling on Capitol Hill

This post was originally published on this site

Subscribe, Like And Share!

Don Harrison, Google’s president of global partnerships and corporate development, told the Senate hearing that the online advertising market was filled with competition.



Photo:

Jacquelyn Martin/Associated Press

Lawmakers from both parties sharply criticized Google over its dominance in advertising at a Senate hearing Tuesday that showcased the arguments likely to play out if the government moves to sue the tech giant for anticompetitive practices.

The senators were particularly focused on Google’s dominant position at every step in the chain of technology that connects web publishers with advertisers, and on the ways Google has used the market power it wields through its own services like search and YouTube to extend its hold over this third-party ecosystem.

Several of them asked about Google’s decision to restrict access to YouTube ad inventory to those using its own ad-buying tools, as well other practices that harnessed advertisers’ hunger for YouTube to advantage Google’s ad tools.

“This looks like monopoly upon monopoly, and a classic case of tying,” said Sen. Josh Hawley (R., Mo.).

Don Harrison, Google’s president of global partnerships and corporate development, said the online advertising market was filled with competition since publishers and advertisers often use multiple services at the same time for buying and selling ads. He repeatedly mentioned that online ad prices have fallen 40% since 2010.

Mr. Harrison took issue with the estimates of Google’s market share outlined in a recent report from the U.K.’s Competition and Markets Authority that was cited by many of the senators, but declined to provide his own market-share estimates.

That report found that Google has more than 90% market share in the tools publishers use to serve ads, and more than 50% in the tools that publishers and advertisers use to interact with advertising exchanges.

Adam Heimlich, chief executive of Chalice Custom Algorithms and a digital-advertising veteran, called the decline in digital ad prices since 2010 “meaningless,” saying it merely reflected the rise of mobile advertising, which is cheaper than desktop ads.

“I think you look for regulation in a market where you see market failure,” Mr. Harrison said. “I do not see market failure in online advertising.”

Sen. Amy Klobuchar (D., Minn.), echoing a common refrain among her colleagues expressing alarm about the fate of publishers in this ecosystem, retorted, “There’s a market failure for these content producers who aren’t able to get advertising anymore—to me, that’s failure, a big failure for them.”

Sen. Richard Blumenthal (D., Conn.) said Google had “an immense conflict of interest” when it sold advertising on behalf of local newspapers while competing against them with its own inventory, and accused the company of gutting newsrooms. “You are using their data for your benefit, not for theirs or their readers, and you are driving them out of business,” he said.

Mr. Harrison said Google was aligned with publishers because it shares revenue with them, and that it had no incentive to destroy the content industry as its core search function would be less valuable if there was nothing out there to look up.

For months the Justice Department has been preparing for a likely antitrust lawsuit against Google, The Wall Street Journal has reported, noting that department officials have expressed different views about the timing and structure of such a legal action. Wall Street Journal publisher News Corp is a longtime Google critic and is among a group of publishers that have been contacted by antitrust investigators.

Mike Lee (R., Utah), who presided over the hearing as chairman of the Senate Judiciary Committee’s antitrust subcommittee, criticized the opacity of Google’s role in the content ecosystem, noting that Google doesn’t tell publishers how much an advertiser originally paid for their ad. Mr. Harrison pointed to a recent blog post in which Google said it took about a 30% cut.

“Sharing how fees work isn’t the same as transparency for the prices of the actual bids,” Mr. Lee responded.

Write to Keach Hagey at keach.hagey@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the September 16, 2020, print edition as ‘Google Executive Questioned on Advertising Practices.’


Subscribe, Like And Share!

Leave a Reply