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After Google web search, anti trust investigation may target ad practices

Google has admitted to regulators in other jurisdictions that the average share that accrues to the company from ad revenues is roughly 30 percent

October 26, 2020 / 03:40 PM IST

A little after the US Department of Justice issued an antitrust action against Search Engine Google's alleged monopolistic behaviour in the web search, there are indications that its advertising practices might also be looked at closely. This would have deep implications in India.

According to a LiveMint report, about 65 to 70 percent of India's digital ad market is controlled by two companies - Google and Facebook.

Google has admitted to regulators in other jurisdictions that the average share that accrues to the company from ad revenues is roughly 30 percent, this is about the percentage that the search engine was to charge as a Play Store fee that found several startups protesting the move.

“Almost every ad that appears on every free app (on the Android ecosystem) has to essentially pass via Google," said Anupam Manur, who studies platform economics at Takshashila Institution, a think tank.

“Google has a near-monopoly on apps that run on Android," Manur said to the paper.

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Reports hint that DoJ investigators have been in talks with third-party ad marketers in the US at least since the beginning of this year. The UK and Australia are also looking at Google’s dominance in digital advertising.

As ads become the central driver for the internet economy, the search engine has also seen this reflected in their revenues as it remains the main source of Google's profitability.

From ads, Google has reported $116.3 billion in advertising revenue (85 percent of overall sales) last year, the report said.

According to Smriti Parsheera, a tech policy researcher with the National Institute of Public Finance and Policy (NIPFP), it is clear that Google is a dominant player in both (web) search and search advertising.

"This is an issue that has already been decided by a case before the Competition Commission of India, in which Google was fined (in 2018)," said Parasheera, adding that the question is whether it is using this dominance in anti-competitive ways.
Moneycontrol News
first published: Oct 26, 2020 03:40 pm

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