Judgement Day 1: Remedy in Need of Remedy

Written by Brook Schaaf

The remedy for Google’s search monopoly was issued last Tuesday. Basically, per the ruling: 

• Google won’t be able to enter exclusive agreements 
• Google won’t have to divest Chrome or Android 
• Google won’t have to stop making payments for distribution 
• Google will have to make some data available to “Qualified Competitors” 

There are multiple other terms, most of them things Google also won’t have to do (read below for my choice of doozy). Overall, the reaction was “angry and disappointed, if not surprised,” as Digiday put it. 

As competitor DuckDuckGo stated, “We do not believe the remedies ordered by the court will force the changes necessary to adequately address Google’s illegal behavior.” Market consultant Erez Levin summed it up, as quoted in AdExchanger: “Google was found to be a monopolist, but the remedy does not seem like it will do anything to materially curb their search monopoly power, at least not anytime soon.” 

While this feeling was widespread, it was not universal. On People vs. Algorithms, the hosts reversed their typical political positions. Erstwhile Euro-socialist Alex Schleifer practically pounded his shoe on his desk, demanding a Neocon-esque military intervention. In reply, center leftists Troy Young and Brian Morrissey jeered, called the Horae* ugly, then unfurled, hoisted, and saluted a giant flag emblazoned with the image of Sundar Pichai. 

The attitude on the All-in Podcast was similarly confident, if not smug, that this was the right outcome, praising Judge Mehta for not fighting the last battle and letting the market sort it out. 

Only…the market hasn’t sorted it out. Nor is it going to anytime soon. My own view is on the grim side of things. It seems to me that camera one–two trickery has been played. Camera one looks at the past and sees–rightly–monopoly; camera two looks at the future and sees–wrongly–certainty. While answer engines do seem like the choice of the future, they have as yet no business model. OpenAI predicts $115 billion in future losses through 2029, and Perplexity just parted ways with its chief of revenue with little to show for it.

Neither are any of the answer engines going to have a ready path to access tens and hundreds of thousands of advertisers. Madison & Wall was the only commentary I saw that called this out: “Arguably, one of the biggest unappreciated advantages has been its capacity to service millions of smaller advertisers and the process-based incumbency that Google has on that front.” To this, I think we can add the quiet incumbency of GA4’s default reassurance: “your ads are doing great, let’s buy more.” 

This is important for the future of affiliate marketing because right now, Google sucks half the oxygen out of the room for performance marketers. Facebook gets the other half, excluding Retail Media Networks. It seems unlikely to me that the value delivered is commensurate with the spend made. Elements of this came out during the antitrust trial, as when the sofa cushions were shaken. Today, PMax attempts to swirl everything together, which can lead to the obvious outcome of high-quality, high-intent traffic blending with low-quality, low-intent traffic. 

This is why my eyes went wide when I read the aforementioned doozy: “Google will not be required to share granular, query-level data with advertisers or provide them with more access to such data. Nor will it have to restore an ‘exact match’ keyword bidding option.” This could well thwart a potential entry point for affiliate marketing into the keyword space by keeping it illiquid.

What I mean by this is that the programmatic ad space is liquid for bids, but the keyword space is not, though it could be. In fact, if the forthcoming display antitrust remedy forces a break between the publisher-side technology, the ad exchange, and the advertiser-side technology (DSPs), then affiliate networks could integrate as DSPs for keywords. If this were to happen, advertisers could redirect their spend for keywords through affiliate program platforms, perhaps even on Google-owned and operated properties. 

Let’s hope that Judge Brinkema makes her judgment with both eyes open.

*Greek goddesses associated with fairness and justice.