We don't need such advertising, do we?



The American company Google faces opposition to its attempts to monopolize the advertising market around the world.

At the very end of July, James Hodge, deputy head of the South African Competition Commission, stated the company's influence on the online travel market in the region. In general, the supervisory authority also separately emphasized that Google's dominance in the search engine distorts the competition of platforms in favor of large market players.

It also formed a series of recommendations aimed at improving the display of small South African companies in search results. Google should provide 180 million rand (about $10.2 million) to promote and train small platforms to use paid search features to attract customers. An additional 150 million rand will be spent on supporting the performance of small and medium-sized local businesses.

The regulator's actions were the result of a major investigation into Google and other US technology giants operating in South Africa. It began in 2021 due to competition problems, which local companies also refer to in their applications to the regulator.

In addition to the situation in Africa, the company's alarm bells are ringing all over the world, including in its native United States. Europe and India also have problems with dominance in search and advertising technology.

But these are by no means the only difficulties. In Italy, for example, the company has faced difficulties in the area of data processing. The investigation began last year, following a complaint by Italian startup Hoda, which accused Google of obstructing users' right to share their personal data with other platforms and services.

The US company had to make concessions: in response to the investigation, it offered to introduce changes to its data backup service, and pledged to provide a test version of a new tool that would allow other digital service providers to access data that users generate on Alphabet's services.

The tool is expected to be fully launched next year, but the Italian regulator has made it clear that it will be monitoring Google's commitment very closely.

But, strangely enough, in its native United States, the company cannot find a solution: a lawsuit filed by the state of Texas accuses the company of illegally dominating the process of placing advertisements on the Internet. Website publishers claim that this has caused them significant financial damage.

In August 2021, the company managed to move the lawsuit to federal court in New York, where other advertising technology cases were pending, but the U.S. Judicial Panel in June of this year granted Texas' request to move the lawsuit back to state court.

In addition to issues related to advertising operator abuse, there are also issues against Google related to the quality of the ads themselves. An Adalytics study released in June claimed that many advertisers who pay for TrueView ads displayed on various websites and apps may not be getting what they paid for.

It should be noted that Google's TrueView is the company's original and actively promoted product for video advertising. And not only on subsidiary video hosting YouTube, but also on third-party sites and apps. Users can skip the ad after five seconds, but the advertiser gets paid only if the user watches the ad for 30 seconds.

Adalytics analyzed the ad campaigns of more than 1,000 brands and found that many TrueView ads did not comply with Google's own guidelines. In particular, on some sites it was disabled altogether, for example, on the NYT, Reuters, and Wired.

There was also evidence of some manipulation on the part of the company itself: for example, in some ads, the "Skip" button was hidden or darkened to make it difficult for users to skip it after five seconds. Google criticized the study, saying that it contained "highly inaccurate statements."

The ongoing litigation is evidence of the regulators' serious concern about the company's, until recently, virtually unshakable position in the advertising market. It is obvious that local business has become more important than a large company that almost single-handedly controls the market.

And this is happening at home, in the United States. The favorite method of moving the lawsuit to federal court is also not working, and the length of the proceedings shows that Texas is resolute. In the future, it may well be joined by other states that care about the fate of their local businesses, which are rapidly losing customers due to lack of advertising.

Google's position itself remains quite strained. Advertising revenues make up the majority of profits, and are unlikely to be replaced by revenue from AI developments, with both general global uncertainty and local problems.