And So It Continues
Yesterday, the DOJ–infused with the spirit of “hipster antitrust”–filed a lawsuit against Google, seeking to break up what they perceive to be Google’s “monopoly” in digital advertising. The suit claims that Google has “monopoly power in the ad-tech industry, hurting web publishers and advertisers that try to use competing products.”
The suit has the same flavor of big is bad—the current philosophy driving the FTC–that we’ve been recently writing about. The DOJ is asking the courts to undo Google’s “anti-competitive” acquisitions of AdMeld (12 years ago) and DoubleClick (15 years ago). At the time, both deals were reviewed by regulators and allowed to go through. They weren’t anti-competitive, and they did not harm consumers. But, again, a new philosophy is driving the FTC.
As we’ve noted before, this strategy of filing suits isn’t just to win but to use the suits as a deterrent to further acquisitions across the business spectrum. Such suits are meant as a warning against acquisitions in general. This is demonstrated in the fact that the DOJ is targeting only one company.
Moreover, it’s demonstrated in the fact that the suit ignores the real competition happening in the digital advertising sector and ignores the acquisitions of smaller companies by Google’s more prominent competitors.
Last year, Microsoft acquired the advertising platform Xandr, which enabled Microsoft to reach a huge advertising deal with Netflix. Apple plans to do more than $30 billion in advertising in the coming years. Amazon’s advertising revenues are higher than Google and Meta.
The government shouldn’t be picking winners and losers in business. Nor should they seek to undo mergers they previously allowed because a new philosophy drives the FTC. This creates a business climate that stifles innovation and competition. Further, it’s an unfair practice. It sets the future precedent that mergers allowed today are subject to review tomorrow– after significant risk, investment and time have already occurred.
How can such a climate foster innovation?