Google, a data mining and extraction company that sells personal information to advertisers, has hit upon a neat idea to consolidate its already-dominant business: block competitors from appearing on its platforms.
The company announced that it would establish an ad blocker for the Chrome web browser, which has become the most popular in America, employed by nearly half of the nation’s web users. The ad blocker — which Google is calling a “filter” — would roll out next year, and would be the default setting for Chrome when fully functional. In other words, the normal user sparking up their Chrome browser simply wouldn’t see the ads blocked by the system.
What ads would get blocked? The ones not sold by Google, for the most part.
The Chrome ad blocker would stop ads that provide a “frustrating experience,” according to Google’s blog post announcing the change. The ads blocked would match the standards produced by the Coalition for Better Ads, an ostensibly third-party group. For sure, the ads that would get blocked are intrusive: auto-players with sound, countdown ads that make you wait 10 seconds to get to the site, large “sticky” ads that remain constant even when you scroll down the page.
But who’s part of the Coalition for Better Ads? Google, for one, as well as Facebook. Those two companies accounted for 99 percent of all digital ad revenue growth in the United States last year, and 77 percent of gross ad spending. As Mark Patterson of Fordham University explained, the Coalition for Better Ads is “a cartel orchestrated by Google.”
So this is a way for Google to crush its few remaining competitors by pre-installing an ad zapper that it controls to the most common web browser. That’s a great way for a monopoly to remain a monopoly.
There’s more to the story, however. The real goal for Google appears to be not just blocking ads sold by other digital suppliers besides Google, but to undermine third-party ad blockers, which stop Google ads along with everyone else’s.
According to the Financial Times, Google will allow publishers what it’s calling “Funding Choices.” The publisher could charge the consumer a set price per page view to use third-party sites that block all advertising. Google would do the tracking of how many pages users view, and then charge them. Users could then “white list” particular sites, allowing ads to be shown on them and removing the charge. If users decided to pay to block ads, Google would receive a portion of that payment, sharing it with the publisher.
Web users will quickly recognize their only options: pay to use the internet, or uninstall the ad blockers and surf the web for free. At least 11 percent of all web users, and perhaps as many as 26 percent of all desktop users, have third-party ad blockers on their devices, a number that will likely grow in the next few years. But it’s easy to see how Google’s policy would depress ad blocker usage — except for the case of Google’s ad blocker, which creates preferences for Google’s own ads.
Google has already been found to have paid off ad blockers to keep its own ads intact. But this new policy creates an internet landscape where Google ensures viewing of its own ads, to the relative disadvantage of competitors.
Senior Vice President of Google Sridhar Ramaswamy describes the concept as a way to support internet websites and users alike, by making online ads less annoying and helping to “maintain a sustainable web for everyone.” It’s hard to build a coalition in favor of annoying ads. And publishers would be guaranteed a revenue stream, either through charging consumers for an ad-free experience, or from the ads themselves. So the policy aligns the interests of virtually everyone on the web content side.
Improving Google’s bottom line and crushing anyone who tries to compete is just a nice side benefit.
With the Federal Trade Commission still at just two members for the foreseeable future, and the acting chairman favoring a laissez-faire approach to internet oligopolies, it’s unlikely any action will be taken in the near term to stop Google from operating as what former FTC official Jonathan Kanter calls “prosecutor, judge, and jury for ad quality.”
Other experts believe that the Department of Justice might take the lead in antitrust enforcement against Google, especially in light of such a forcing event. That’s especially true if the department’s antitrust division sees the Coalition for Better Ads as a cartel, which the FTC does not typically enforce.