Will Google and the FTC Go In for a Rematch?


The FTC is reportedly investigating Google for anti-competitive actions in the $ 9.64-billion U.S. display advertising market.

An inquiry in display advertising might look initially like more of a stretch than the FTC’s failed challenge to the company on search and search advertising. But Google is growing like a weed in the display advertising market, analysts say.

The FTC hasn’t confirmed whether or not it is investigating Google’s display — essentially non-search — advertising business.

In 2008, Google earned just 3 percent of U.S. display ad revenue, according to eMarketer. but in the first quarter of this year, it brought in 24 percent, according to IDC. Facebook, with 9 percent, was the company’s closest competitor. (eMarketer’s data from 2012 indicates that Google still trailed Facebook slightly.)

Google has automated more of the advertising process than its competitors have and can provide better analytics to marketers, based, also, on the data it has on users from its various services.

“They are the only vendor that has the entire advertising value chain under one roof. If you take all the advertising technology ‘stack,’ or value chain, there’s a lot of segments where Google is dominant. It’s not a monopoly per se, but if I was a regulator I would keep a close eye on it, because the sum is more than the parts,” said Karsten Weide, an analyst at IDC.

As mobile advertising grows, Google also sits in a dominant position there as well. The company has simply added a mobile advertising checkbox to its automated ad placement system, leveraging its dominance on desktop to make it a major player in mobile advertising.

“Google has a huge advantage because they have a huge distribution with both publishers and users,” said Weide.

Given Google’s reach, advertisers have little incentive to look to other ad networks.

But it’s one thing for regulators to look into a market trend and another for them to sue the company for anti-competitive practices. To make antitrust charges stick, regulators would have to demonstrate that Google was actively using its might to squelch competitors and that the result was bad for consumers.

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