Facebook and Google should be watched carefully by marketers at today's antitrust hearing
- Marketers should pay close attention to Facebook and Google in today's antitrust hearing, since they're both under fire for their anti-competitive digital ad practices.
- Meanwhile, Apple is being probed for its App Store fees and Amazon for its use of shopping data to inform its own private label products.
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Today, the CEOs of tech giants Facebook, Google, Apple and Amazon will be questioned by Congress about their companies' alleged anti-competitive practices. We think marketers should watch the duopoly's testimonies especially closely, as both Facebook and Google will likely come under fire for their control over the digital ad market.
For context, the two together make up over half (54.3%) of the digital ad market by revenues, per our estimates. Meanwhile, Apple is being probed for its App Store fees and Amazon for its use of shopping data to inform its own private label products.
Below is a breakdown of what the duopoly in particular will be questioned on, and how the hearing could affect marketers:
- Google is facing the most immediate threat, as the Justice Department has been preparing a lawsuit against the company for the past few months. Google is the larger company of the duopoly, making up 31.6% of the digital ad market. But it's mainly a target because it owns companies integrated in all steps of digital advertising — including supplying, purchasing, serving, and measuring ads — which makes it difficult for brands to advertise online without using at least one of Google's products. In the past, UK authorities suggested forcing Google to sell off some of the companies within this ad tech stack. If the US chooses to go that route, it could theoretically make advertisements cheaper by promoting more competition — but on the flip side, advertisers might not have the same access to Google's treasure trove of user data.
- Facebook could face scrutiny for its practice of acquiring or mimicking its rivals — plus, the ad boycotters may have a hand in the hearing. The social media giant's acquisitions of WhatsApp and Instagram are particular targets, alongside its practice of reverse-engineering features from rivals — like its near-direct TikTok clone Reels, which we'll cover more in-depth below. With Facebook buying up or copying rivals, advertisers have few other options to turn to, something this month's ad boycott has brought to light even further: Axios reported Monday that the organizers of the boycott wrote to lawmakers asking them to probe Zuckerberg's comments that advertisers would "be back soon enough," questioning if that's because he knows they have no other alternatives. With dissatisfaction clearly brewing, it's likely that advertisers would welcome competition from alternative social media platforms — though again, it would be difficult to match the reach Facebook provides, at least in the short term.
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