| | Friday reading: Things you may have missed in the Google antitrust ruling
You’ll no doubt have seen that a federal judge in the US this week ruled that Google has violated Section 2 of the Sherman act by “maintaining its monopoly in two product markets”, namely online search and text search ads.
Google’s exclusive distribution agreements (paying companies such as Apple and Samsung to install Google on smartphones and web browsers) were found to have foreclosed half of the search market by query volume.
If you haven’t read the 286-page decision, Jason Kint provided some useful highlights via his account on X. Here are a few bits that caught our eye:
“…Google does not consider competitors’ pricing when it sets text ads prices.”
The court found there “is no dispute that the cost-per-click for a text ad has grown over time” with Google driving increases of “between 5% and 15% at a time, without a significant shift in advertiser spending to GSE competitors.”
Though Google contends that auctions set ad prices, the ruling finds that “Google controls key inputs to the auctions that influence the ultimate price that advertisers pay.”
“Even on Bing, ‘google.com’ is the number one search”
Perhaps not surprising, but it jumps out in a section discussing the strength of the Google brand and how this can be a deterrent to market entry.
“Importantly, generative AI has not (or at least, not yet) eliminated or materially reduced the need for user data to deliver quality search results.”
One former Google engineer highlighted how beneficial user data (query click information) is to providing relevant search results, and that AI models don’t eliminate or supplant that need. The context here is that Google has access to a lot of user data. How much? Well…
On mobile, “…Google receives nineteen times more queries than all of its other rivals put together.”
On “the importance of scale”, the ruling highlights evidence that states on mobile, 98.4% of unique phrases were seen only by Google, 1% by Bing.
One ex-Googler said revenue share agreements “provide an incredibly strong incentive for the ecosystem to not do anything”
They “effectively make the ecosystem exceptionally resist[ant] to change,” according to the testimony of former Google Senior Vice President of Ads and Commerce, Sridhar Ramaswamy (who founded now-shuttered search engine Neeva).
Friday reading: Grok and your data
Users of X (formerly Twitter) were recently alarmed to discover that a setting had been rolled out across all accounts that opted users in to "training and fine-tuning" the platform's sarcastic AI chatbot, Grok, via their posts, interactions, inputs, and results. While the setting can be deselected, it is turned on by default.
X's @Safety account posted that "All X users have the ability to control whether their public posts can be used to train Grok, the AI search assistant." A Help page also elaborated that users can opt out by making their account and posts private, as only public interactions are used to train Grok.
However, the move appears to have landed X in some regulatory hot water. The Irish Data Protection Commission (DPC), X's European privacy watchdog, told TechCrunch it was "surprised" by the development and had "followed up" with X. Press subsequently reported that the DPC had launched High Court proceedings against X, expressing concerns that X had contravened the GDPR by training Grok on the data of EU and EEA users without their consent. The next version of Grok is due to be launched in August.
In a response, X's @GlobalAffairs account posted that "The order that the Irish DPC has sought is unwarranted, overbroad and singles out X without any justification", adding that "X has done everything it can to give users more control over their data."
Meta has also come under scrutiny over its approach to enabling UK, EU and EEA users to opt out of training Meta AI, and in June, bowed to regulatory pressure to pause the rollout of Meta AI in Europe. |
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