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- [00:00]
Zeta Global
This episode is brought to you by Zeta Global. Do you know what it takes to transform marketing into a data driven profit center? Are you able to align the C suite around your AI vision and strategy? Zeta Global has the Playbook to help you get started. Download Driving Growth in the AI Era Today at zetacmo AI Book. Again, that's Zeta CMO AI Book.
- [00:36]
Kate
They say everyone has their day in court. But here's the kicker. You never know if Judgment Day is going to go your way. I'm Kate with marketecture and this is the Refresh, your weekly download on what went down in advertising. Today is Monday, April 21, 2025. This week we're covering two high profile big tech legal battles, the start of Meta's antitrust lawsuit, and then a decision finally in Google's ad tech antitrust case, not to be confused with their search antitrust case. So let's get into it. Since we're spending the entirety of this episode talking about monopolies in antitrust, I figured it might be helpful to level set what even is antitrust. The FTC defines antitrust as a set of laws and regulations designed to promote free and open markets by prohibiting unfair competition and anti competitive practices. These laws aim to prevent companies from using their market power to unfairly restrain trade, raise prices or harm consumers. Great. Now what is a monopoly? The FTC defines a monopoly as a firm possessing significant and durable market power, meaning the ability to raise prices or exclude competitors for a prolonged period. This power is not necessarily about having a 100% market share, but about the firm's ability to exert control in a market. Okay, now that we've got that sorted out, what are the primary elements of determining whether a company has violated antitrust laws? The first is market dominance, which is directly linked to how the market is defined. The second is whether a company engaged in anti competitive practices and finally, whether consumers or competitors were harmed as a result of these anti competitive practices or actions, including inability to compete, higher prices or limits to consumer choice. Separately but related and worth mentioning here, most people assume the FTC under a Trump administration would be friendly to Big Tech. However, the current FTC chair Andrew Ferguson actually aligns fairly closely with how former FTC chair Lina Khan ran things. Alright, let's talk about Meta's antitrust case, which started last Monday, April 14th. CEO Mark Zuckerberg spent three days on the stand and then former COO Sheryl Sandberg took over on Wednesday. Head of Instagram Adam Mosseri is also expected to take the stand. The FTC'S case against Meta focuses on their acquisitions of Instagram and WhatsApp, arguing the following First, Meta engaged in a buy or bury strategy, essentially eliminating competition by acquiring companies or neutralizing them through other means. Unfortunately for Meta, subpoenas are a powerful thing, and the FTC is bringing receipts here, including one from 2012 that's being pegged as a pretty powerful smoking gun. In it, Mark Zuckerberg suggested that Facebook could buy Instagram to, quote, neutralize a potential competitor. Alongside this, the FTC alleges that by eliminating competition, AKA options, consumers have been harmed as they're forced to use Meta's products. But Meta isn't forced to return the favor in the form of better products and services, with the value exchange being more ads but worse data privacy and security. Allegedly, much of this is contingent on whether the judge believes Meta falls into the FTC's market definition, which is that Meta operates within the personal social networking market with Snapchat being its only competition, as Meta's core function is to, quote, connect friends and family. Listen, I'm not defending Meta, but I think in the year of our Lord 2025, this is a bit of a tough sell. Meta, of course, rebuts all of these allegations by arguing they've made the market better by providing the resources needed to improve Instagram and WhatsApp, and that they operate within a much larger market where they face some pretty stiff competition. Thank you very much. Meta's acquisitions of Instagram and WhatsApp happened 10 to 15 years ago within a very different market and regulatory environment. These acquisitions were also approved by regulators at the time, which adds a variable of difficulty to the FTC's case. What I'm personally watching in this case how the court's eventual ruling will delineate between what's just good business practice or what's fair game when it comes to growing and sustaining your business. And then what constitutes taking things a bridge too far, carrying a company like Meta into antitrust territory? As an aside, it is horrifying to think about someone pulling all of my emails from 10 plus years ago. But then again, maybe that's karma at work, considering Facebook has made resurfacing your cringy statuses a core product feature. Moving over to Google, where we finally, finally received a verdict in their ad tech antitrust case. And here's the thing about court cases, they have a funny way of taking so long that you kind of just forget about them. That said, momentum in Google's case was revitalized late last week with US District Court Judge Brinkama publishing her 115 page ruling saying, among many things, Google has violated Section 2 of the Sherman act by willfully acquiring and maintaining monopoly power in the Open Web Display Publisher ad server market and the Open Web Display ad exchange market and has unlawfully tied its publisher ad Server DFP or DoubleClick for publishers and Ad Exchange Ad X in violation of sections 1 and 2 of the Sherman Act. While Judge Brinkma found Google has an illegal monopoly over the publisher ad server and ad exchange markets, she did not find Google guilty of maintaining an illegal monopoly over the general market for online display ads. Google plans to appeal because of course, the other overstep Judge Frankma decided to overlook was whether Google should be sanctioned for effectively withholding and destroying evidence, or at least failing to preserve it with sufficient evidence to find Google guilty. In other aspects of the case, she more or less decided it wasn't worth it to add this on as well, but also made it clear that she's not condoning that behavior. Judge Mehta came to a similar conclusion in Google's search antitrust case as well. While a date hasn't been set yet for the remedies phase of this case, potential remedies include forced divestiture of Google's ad tech assets and a ban on Google self preferencing its own ad products and services. Unfortunately, we'll be hearing more about Google's legal woes as the remedy phase for their search case begins today, April 21st. Proposed remedies here primarily consist of Google needing to sell its Chrome browser and possibly end partnerships with big tech comrades like Apple that ensure Google is the default search engine for its devices. We haven't seen rulings of this magnitude since Microsoft's case in 1998, and at the end of the day, Microsoft ultimately settled, making its operating system more accessible to competitors and modifying its bundling practices. It's possible that Google would try to do something similar, and it definitely wouldn't be the first time. But these cases against them seem to sit in a different tier of violation. As we sit on the tipping point of the next era of massive tech and advertising disruption, I can't help but wonder, will up and coming companies like OpenAI learn from Meta and Google's mistakes? What will the big antitrust cases be 10 to 15 years from now, and who will be at their center? In closing, Taylor Swift once graced us with this sage wisdom. Get a good lawyer. Meta and Google better hope theories are up for the challenge as their legal battles continue. That's all we have time for today. Thanks for joining us for the refresh, and we'll catch you next week.