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Antitrust

Google Grilled on Anticompetitive Digital Advertising Practices During Senate Subcommittee Hearing

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Screenshot of Don Harrison, president of global partnerships and corporate development at Google, during the hearing

September 16, 2020 — Both Republican and Democratic senators on Tuesday grilled a top Google official at a hearing just weeks before the U.S. Justice Department is expected to file an antitrust lawsuit against the search engine giant.

Throughout the antitrust subcommittee hearing, senators focused on whether Google, which bolsters a 90 percent hold on the U.S. online advertising market, misuses its dominance in online advertising to exclude competitors from the market.

The fact that Google bought out a series of digital start-ups that promised to drive competition in the online ad market was one of the main pieces of evidence cited by the senators.

“Google purchased competitors, including DoubleClick and AdMob, to help make it the dominant player in online advertising,” said Sen. Amy Klobuchar, D-Minnesota. “Do you think Google would hold 90 percent of the advertising market if you didn’t buy DoubleClick?”

She and the others were questioning Don Harrison, president of Google’s corporate development since 2012, who appeared remotely because of the pandemic. Harrison oversees the company’s advertising partnerships with other companies.

Klobuchar grilled Harrison on the company’s practices on YouTube, which Google acquired in 2006.

“Half of video ad inventory, outside of walled gardens like Facebook, is on YouTube,” said Klobuchar. She said Google weakened its video ad competitors in 2015 by insisting that only DSPDV360 platforms could bid to place ads on YouTube, after previously allowing all platforms to do so.

This action had a devastating effect on Google’s competitors as “most advertising agencies prefer to only use one DSPDV,” said Klobuchar.

Sen. Amy Klobuchar, D-Minnesota, during the antitrust hearing

The limitation not only forced YouTube’s ad inventory to its own affiliates, which utilize Google’s DSP, it also had the effect of driving non-YouTube ad volume to Google, and away from rival DSPs.

Harrison said that decision came as a result of European privacy laws. Throughout the hearing, Harrison disputed that Google is a “big company” and said advertisers have the “option to go to other websites.”

Sen. Richard Blumenthal, D-Conn., also criticized Harrison’s replies and said that “Google maintains a tight grasp over each of the many steps between an advertiser looking to place an ad and a website looking to host it.”

How can a single company “represent the seller, the buyer, make the rules, and conduct the auction,” questioned Blumenthal? This practice is “the nub of the issue from an antitrust standpoint.”

Sen. Josh Hawley, R-Missouri, questioned Harrison on the company’s recent decision to boot The Federalist, a conservative web site, off of its advertising network over the site’s violations of a Google policy against derogatory content. The matter was specifically related to Black Lives Matter protests.

Harrison maintained that Google “did not demonetize The Federalist” and that the website was free to use the company’s platform, as long as the comment section was moderated, as “some comments were objectionable and offensive.”

“We want to ensure our ads do not show up next to harmful content,” said Harrison.

Yet Hawley maintained that this was a reflection of the Google’s extraordinary market power, which allows the company to force others to moderate their content to Google’s standards or live in fear that the company will “adopt policies to cut off their revenue stream.”

Antitrust

‘Time is Now’ for Separate Big Tech Regulatory Agency, Public Interest Group Says

‘We need to recognize that absolutely the time is now. It is neither too soon nor too late.’

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Photo of Harold Feld, senior vice president at Public Knowledge

WASHINGTON, June 21, 2022 – Public Knowledge, non-profit public interest group, further advocated Thursday support for the Digital Platform Commission Act introduced in the Senate in May that would create a new federal agency designed to regulate digital platforms on an ongoing basis.

“We need to recognize that absolutely the time is now. It is neither too soon nor too late,” said Harold Feld, senior vice president at Public Knowledge.

The DPCA, introduced by Senator Michael Bennet, D-CO., and Representative Peter Welch, D-VT., would, if adopted, create a new federal agency designed to “provide comprehensive, sector-specific regulation of digital platforms to protect consumers, promote competition, and defend the public interest.”

The independent body would conduct hearings, research and investigations all while promoting competition and establishing rules with appropriate penalties.

Public Knowledge primarily focuses on competition in the digital marketplace. It champions for open internet and has openly advocated for antitrust legislation that would limit Big Tech action in favor of fair competition in the digital marketspace.

Feld published a book in 2019 titled, “The Case for the Digital Platform Act: Breakups, Starfish Problems and Tech Regulation.” In it, Feld explains the need for a separate government agency to regulate digital platforms.

Digital regulation is new but has rapidly become critical to the economy, continued Feld. As such, it is necessary for the government to create a completely new agency in order to provide the proper oversight.

In the past, Congress empowered independent bodies with effective tools and expert teams when it lacked expertise to oversee complex sectors of the economy but there is no such body for digital platforms, said Feld.

“The reality is that [Congress] can’t keep up,” said Welch. This comes at a time when antitrust action continues to pile up in Congress, sparking debate across all sides of the issue.

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Antitrust

FTC Commissioner Concerned About Antitrust Impact on Already Rising Consumer Prices

Noah Phillips said Tuesday he wants the commission to think about the impact of antitrust rules on rising prices.

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Screenshot of Federal Trade Commissioner Noah Phillips

WASHINGTON, May 17, 2022 – Rising inflation should be a primary concern for the Federal Trade Commission when considering antitrust regulations on Big Tech, said Commissioner Noah Phillips Tuesday.

When considering laws, “the important thing is what impact it has on the consumer,” said Phillips. “We need to continue to guard like a hawk against conduct and against laws that have the effect of raising prices for consumers.”

Current record highs in the inflation rate, which means money is becoming less valuable as products become more expensive, has meant Washington must become sensitive to further price increases that could come out of such antitrust legislation, the commissioner said.

Phillips did not comment on how such movies would mean higher prices, but that signals, such as theHouse Judiciary Committee’s antitrust report two years ago, that reign in Big Tech companies and bring back enforcement of laws could mean higher prices. He raised concerns that recent policies are prohibiting competition rather than facilitating it.

This follows recent concerns that the American Innovation and Choice Online Act, currently awaiting Senate floor consideration, will inhibit America’s global competitiveness by weakening major American companies, thus impairing the American economy. That legislation would prohibit platform owners from giving preference to their products against third-party products.

This act is one of many currently under consideration at Congress, including Ending Platform Monopolies Act and Platform Competition and Opportunity Act.

Small businesses have worried that by enacting some legislation targeting Big Tech, they would be impacted because they rely on such platforms for success.

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Antitrust

Critics and Supporters Trade Views on American Innovation and Choice Online Act

American Innovation and Choice Online Act is intended to protect fair competition among businesses, but panelists differed on its impact.

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Photo of Amy Klobuchar from August 2019 by Gage Skidmore used with permission

WASHINGTON, May 10, 2022 – Experts differed on the effect that antitrust legislation targeting big tech companies allegedly engaging in discriminatory behavior would have on small businesses.

Small businesses “want Congress not to do anything that will screw up or weaken the services that they rely on for their business,” said Michael Petricone, senior vice present of the Consumer Technology Association, at a Protocol Live event on Thursday.

Petricone said that antitrust bill would encourage tech companies to relocate to other countries, harming the American economy. He said small businesses would be affected the most.

Instead, Petricone called for  a “smarter immigration policy” to allow foreign innovators access to American tech market, as well as the defeat of the antitrust legislation.

But other said that small businesses suffer from predatory behavior by big tech companies. “Companies can’t get their foot in the door when there is already self-preferencing,” said Awesta Sarkash, representative for Small Business Majority, an advocacy organization, adding that 80% of small businesses say they want antitrust laws to protect them.

Self-preferencing on online platforms is detrimental to the success of small businesses who rely on social media advertising for business, she said. The new antitrust proposals would ensure an level playing field and promote fair competition, she said.

The American Innovation and Choice Online Act would prohibit certain online platforms from unfairly preferencing products, limiting another business’ ability to operate on a platform, or discriminating against competing products and services.

The bill sponsored by Sen. Amy Klobuchar, D-Minn, was introduced to the Senate on May 2 and is awaiting Senate floor consideration.

The debate follows concerns raised by both democrats and republicans about America’s global competitiveness as the bill would weaken major American companies.

If passed, the bill will follow the European Union’s Digital Services Act which similarly sets accountability standards for online platforms, preventing potentially harmful content and behavior.

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