The outcome of Google’s antitrust trial could significantly reshape the digital advertising ecosystem and have a profound effect on digital publishers.
The trial concerns whether Google has leveraged its dominant position to prevent competitors from entering the ad tech market. According to the allegations, Google's integrated platforms, such as DFP, AdX, and Google Display Network, have limited publishers’ options and hindered competitors’ ability to operate, particularly after acquisitions like DoubleClick. Furthermore, it has been speculated that Google has deliberately interfered with the functionality of header bidding, preventing the emergence of fairer competition conditions in ad auctions.
Scenarios of How Google’s Trial Could Affect Digital Publishers
We present three scenarios that focus on how the potential outcomes of the trial might impact digital publishers.
Scenario 1: Google Wins and Strengthens Its Position
If Google wins the trial, its dominant position in digital ad technology will likely remain unchanged or even strengthen. This could mean publishers’ ability to negotiate with alternative ad platforms will remain limited, and their reliance on Google’s ecosystem might increase.
Potential impact on publishers: Publishers may have to continue paying high fees to Google. For example, Gannett has reported that Google takes up to 37% of every dollar, placing publishers in a financially vulnerable position. A victory for Google could also reduce opportunities to adopt new, competitive technological solutions, further consolidating its power.
Exiting Google’s ecosystem could be costly and challenging for many publishers. For instance, News Corp lost millions in 2017 after moving away from Google’s AdX platform. The high switching cost could deter publishers from exploring alternative platforms and deepen their dependence on Google’s technology.
Scenario 2: Google Is Fined, But Its Position Remains
In the second scenario, Google partially loses and is hit with significant fines, but the company is not required to sell its ad tech assets. Google would continue to operate much as before, and the costs of the fines could be passed on to publishers and advertisers.
Potential impact on publishers: Even if Google is penalised with fines, its market position will remain strong, which could mean that Google would attempt to pass on the costs of the penalties directly to publishers and advertisers. This would likely increase their financial burden further. Publishers would still pay high fees for Google’s services, and the added costs from fines could weaken their bargaining power. Imposing fines might not significantly change the competitive dynamics in the market, limiting publishers’ ability to negotiate better terms.
Scenario 3: Google Loses and the Market Opens to Competition
If Google loses and is forced to sell parts of its ad technology, the market could open to fairer competition. This would provide publishers new opportunities to use various ad platforms and technologies, improving their negotiating position and reducing their dependence on Google’s ecosystem.
Potential impact on publishers: Opening the market to competition would create more options for publishers and allow them to negotiate more competitive pricing for ad platforms. Increased competition could also encourage the rise of more transparent and fairer players in the market, which would boost confidence in ad auctions and reduce market manipulation.
However, market opening could also lead to new regulatory measures, which could help and challenge the market’s restructuring. New regulatory requirements might bring additional administrative burdens for publishers. Still, at the same time, they could prevent the most prominent tech players from reinforcing their dominance, creating more sustainable competitive conditions in the long term.
Conclusion
The outcome of Google’s antitrust trial could significantly change the operating environment for digital publishers. If Google wins, publishers are likely to continue paying high costs and may face increasing dependence on Google’s platforms. If Google is fined but its position remains intact, the financial pressure on publishers could intensify.
Market competition could increase if Google loses and is forced to sell parts of its business. This would provide publishers with new opportunities to use alternative ad platforms and technologies, improving their negotiating power and reducing their reliance on Google’s ecosystem. The sale of technology, however, could bring new regulatory measures aimed at ensuring the market does not once again become concentrated in the hands of a few significant players. While these regulatory requirements could add additional burdens for publishers, they could create more sustainable and fairer competitive conditions in the long term.
Publishers must adapt to changing market conditions and potential regulatory requirements regardless of the outcome. The final arguments in the trial are expected to be heard at the end of November, but the final decision may not be expected until later next year.