Many affluent, well-educated people spend a lot of time fulminating about which direction politics is moving on. Specifically, are governments becoming more authoritarian? Are minorities being oppressed? Whilst angst of this sort is very noble, it ignores the fact that the key development of the past decade has been the rise of tech which gradually erodes the power of governments – elected or otherwise – to control their economies and their people. This superb article in the Scroll explains how powerful Google has become in deciding not just how you & I will see the world (through Google’s all-powerful search engine), but also which media agencies will make money (from providing valuable content to you & me) and how much money they will make.
Karnika Kohli of Scroll begins by highlighting recent developments in Canada: “Canadians will no longer be able to find local news websites while searching for news on Google. That is because Google, the world’s largest search engine, announced on June 29 that it will be removing links to Canadian news from its products.
The company’s decision was a reaction to a new Canadian law that compels tech giants to pay news publishers for using their content.
Senior Google official Kent Walker said that the Canadian government’s decision was unfair as it would force the company to pay simply for facilitating access to news from Canadian publishers.
However, Canadians will still be able to access these websites by typing the URLs directly into their browsers.”
Google has been in similar scraps below in the courts of the UK, the EU and the US. Media companies, especially websites providing news & opinions, believe that Google deprives them of around half of their advertising revenue. This is result in either these news oriented sites closing down or severely paring back their operations. That in turn creates an information void which, as all of us have seen, social media fills with all sorts of weird points of view.
Ms Kohli explains how this process – of websites losing their commercial viability – plays out.
Dimension #1 is that Google acts both as a medium of discovery of these websites (through its search engine) but Google as runs the ad exchanges where companies buy & sell ad space AND Google also sells it own ad space. Therefore, the thinking goes that Google has a conflict of interest: “The bulk of online display advertising space is bought and sold in real-time on online “advertising exchanges”. These exchanges are very similar to electronically traded financial markets. In these exchanges, Google is the largest seller of ad space globally. It operates the leading ad trading platform as well as the most prominent intermediaries that ad buyers and sellers go through to trade….
This means that Google has a conflict of interest. To use a football analogy, Google is a referee who is also playing in the game.
In her widely lauded research paper titled “Why Google Dominates Advertising Markets”, researcher and author Dina Srinivasan alleges, “Google’s exchange shares superior trading information and speed with the Google-owned intermediaries, it steers buy and sell orders to its exchange and websites (Search & YouTube), and abuses its access to inside information.”
Srinivasan wrote in The New York Times: “These problems took root more than a decade ago when Google made a bid for DoubleClick, the popular service that helps websites sell ad space. The service became part of Google’s ad exchange division, which it later called AdX.”
After acquiring DoubleClick, Google not only pushed its advertising clients to its own exchange but also stopped competing exchanges run by Yahoo, Microsoft and others bidding on the ad space, she alleged.”
“Unsurprisingly, such self-dealing allowed Google – a late entry to the exchange market – to quickly grow AdX into the largest trading venue for ads,” she noted. “Websites paid the price: The lack of exchange competition resulted in their ad space selling for up to 50% less than what it otherwise would.”
In 2020, more than 84% of the $146 billion in ad revenue generated by Google went towards its own Search and YouTube products. In 2022, Google’s ad revenue amounted to $224.47 billion.”
Basically, as per this line of thought, hundreds of billions of dollars ad revenue belonging to small, independent websites is ending up instead with Google.
Dimension #2 is content and specifically those few lines of text or graphics that you see when you enter a term in the Google search engine. “According to a 2022 report, 99,000 search queries were processed by Google every second. Over 8.5 billion times a day people across the world searched for information such as recipes, news, games, weather updates, celebrity gossip and much more.
Every search leads to pages full of links with thumbnails, headlines and snippets based on which the users decide which site they want to visit – and which they choose to avoid. Many publishers believe that Google is infringing on their content by showing these snippets. This practice also keeps users from clicking on external website links since they get the gist of the content on Google itself. As a consequence, some publishers say that if the tech giant wants to use their content, it should pay…
In India, the News Broadcasters and Digital Association, Digital News Publishers’ Association and Indian Newspaper Society have filed complaints against Google with the Competition Commission of India about their interests being affected.
The News Broadcasters and Digital Association in its complaint claimed that the tech giant “free-rides on the content of its members by forcing them to provide their news content to Google to prioritise their web links in the Search Engine Result Page”.”
However, the challenge is that websites (or news publishers) have no alternative to Google – most of their traffic comes from Google searches. So whilst publishers can go court to press their case, Google’s real grip on the world we live in arises from the fact that there is no alternative to Google when it comes to search!
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