Thinking about remedies for Google

I’m Alan Chapell. I’ve been working at the intersection of privacy, competition and advertising for decades and I’m going to be writing for The Monopoly Report.

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The second episode of our podcast dropped this week featuring Tim Cowen, antitrust lead at Preiskel & Co. Wwe talk about remedies in the DOJ Google search trial.

Thinking about remedies in the Google antitrust trials

Last week, we moved two baby steps closer to resolving some of the antitrust claims against Google. First, Judge James Donato issued the order for injunctive relief against Google in its antitrust suit with Epic Games. The judge seemed at best unimpressed with Google’s approach. When a judge writes that “none of this bears on the facts and issues in this case” in reference to a key legal argument, you know you’re probably not having a good day. Domo Arigato, Judge Donato

The second step came from the Department of Justice. On October 8th, the DOJ filed its proposed framework of remedies to address Google's anticompetitive conduct in maintaining monopolies in U.S. “general search services” and “search text advertising.” The DOJ has until November 20th to file its final recommendations and Google has until December to respond. If all stays on track, Judge Mehta should rule sometime in 2025. In that light, I’m viewing the proposed framework as more akin to a jumping off point in a long-term negotiation. As I’ve written elsewhere, this whole process could take years to conclude.

What was Google’s response?

Google characterizes the DOJ response as “radical” and “pursuing a sweeping agenda” that is rife with “unintended consequences.” Google’s argument can be boiled down to: What DOJ suggests is bad for privacy, bad for innovation, bad for consumers and bad for publishers and advertisers. Buying into that argument requires one to ignore the writings of George Orwell, the history of antitrust law (at least up until 1980), and a whole lot of evidence presented in both Google cases.

Google’s response to the Epic decision was similar to its response to the DOJ — unintended consequences and increased privacy and security risks if the decisions are allowed to stand. Google’s response also takes issue with the definition of the market – noting that a different court (in Epic’s antitrust case against Apple) had made a different determination. Keep a bottle of your favorite beverage handy so you can do a shot every time you hear the phrase “market definition” from Google over the next year.

The problem with access remedies

Turning to the DOJ proposal, I’m not a fan of requiring Google to provide access to data to the rest of the market. This was the argument of this week’s podcast guest Tim Cowen. The problem here is more practical than a legal. I’m skeptical that a process can be put into place that actually achieves its stated objectives. One where Google won’t run circles around everyone - regulators included.

Case in point. Look at what’s gone on with respect to third-party cookie (TPC) deprecation and the Privacy Sandbox. You’ve got two regulatory agencies (CMA, ICO) overseeing the creation of an alternative set of ad platform tools, an independent monitoring trustee and dozens of companies participating as best they can. And there’s even a set of binding set of commitments Google made to act as the north star in this process. And where are we at this point? I have no idea. On the eve of getting a bunch of bad feedback about the effectiveness of the Sandbox tools this past summer, Google apparently said something like, “oh, sorry, this process doesn’t really work for us anymore… we’ll try something else at a later date.” All due respect everyone involved, it’s hard to look at the Sandbox process as anything other than farcical at this point.

Yeah, but the DOJ will do better (also, don’t hate the player, hate the game)

Yeah, maybe the DOJ will be able to do what the CMA has not (at least not up to this point). With the CMA, Google was able to negotiate a set of commitments which are a bit opaque in places and don’t necessarily address the complexities of Google’s web of businesses (forgive the bad pun). This isn’t a critique of the CMA. Fact is - there are so many places within the ecosystem that Google controls and that really limits the ability of any effort to come at this piecemeal. And let’s acknowledge that Google is just better at this bureaucratic policy stuff than everyone else.

Take Privacy, for instance. It’s only one of the many issues that will be raised as this process plays itself out. It is certainly helpful that the DOJ is wary of Google’s use of “pretextual arguments to maintain market position or deny scale to rivals”. But will the DOJ really want to be policing all this for the next five years?

But let’s go down that road. Let’s say that Google is compelled to provide access to data from Google. Sounds great, right? But here’s the thing. In order to get access to this data, your company will need to demonstrate that you meet or exceed a set of standards. OK. Who creates those standards? The W3C? (not again!) More likely than not, the standards will be heavily influenced by Google.

And who gets to determine whether your company meets those standards? Is the DOJ going to tap TrustArc, or bring Evidon back? Probably not. Google will almost certainly have a say in this determination as well.

Don’t get me wrong - I’m not against the creation of rules. But if you think they’ll be created and enforced in a way that is evenhanded, you haven’t been paying attention these past 20 years.

Is it possible that the DOJ will craft a better mousetrap? Sure. There’s always a chance. But if you ask me, the DOJ is more likely than not to push for divestment.

Alan’s Hot Takes…

There’s so much going on with big tech these days. Here are a few stories that struck me over the past week. Use these to help build rapport at the beginning of your next sales call.

• FTC is unhappy with social platforms - The FTC published a privacy report that is critical of Social Media and Video Streaming Services. The money quote: “self-regulation has been a failure.” In my view, that quote is a bit misleading. The self-regulation program’s ain’t perfect, but many (most?) of the big social and video platforms don’t generally participate in the main privacy self-regulation programs.

• Who owns cross-device? This isn’t just a business question; its now become a legal question too. IntentIQ claims to have invented probabilistic cross-device, and has prevailed in a patent claim against Amazon. Next stop, IAB Tech Lab? And you thought brand safety was a tax on the market…

• Social Platforms and AI? We spent much of the summer watching (mostly EU) regulators come after social platforms for leveraging user data for AI. Now Snapchat offers My Selfie - which reportedly allows users to create AI-generated images using their selfies. What could possibly go wrong?

• More Sandbox Research – While we wait for the Q2 2024 Privacy Sandbox updates we were promised, check out some academic research led by Garrett Johnson that focuses on the Protected Audience API. I have lots of respect for Garrett, but I'd be wary of making policy decisions based on this research: (1) noisy data, (2) small sample size, (3) need more clarity re: type of advertisers, (4) may be outlier, (5) PA API is only a subset of tools designed as TPC cookie replacement. Let’s see if the Google folks use this research to demonstrate that the Sandbox tools are close to viable. Remember, its supposed to be Google’s responsibility to demonstrate that the Sandbox tools are a viable replacement for third-party cookies in Chrome.

• California law requiring “one-click” subscription cancellations - California AB 2863 goes into effect July 1, 2025. Publishers, authorized agents and anyone moving to a subscription model should be keeping an eye on this law - particularly as ad supported gets more and more complicated by new privacy rules.

• Browsers & mobile o/s won’t need to provide universal opt-out mechanisms – A California law that would have required that browsers and mobile o/s providers include a universal opt-out mechanism was vetoed by Governor Newsom. Will cover this more in a future article, but for now I’ll just say this: Biggest winners here are the browser vendors - particularly those who enact opt-out signals by default.

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