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- [00:00]
Victoria Craig
Viking committed to exploring the world in comfort. Journey through the heart of Europe on an elegant Viking longship with thoughtful service, cultural enrichment and all inclusive fares.
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Jan Wolf
Discover more@viking.com hey TNB listeners, before we get started, a heads up. We're going to be asking you a question at the top of each show for the next few weeks. Our goal here at Tech News Briefing is to keep you updated with the latest headlines and trends on all things tech. Now we want to know more about you, what you like about the show, and what more you'd like to be hearing from us. Our question this week is what would you like to hear from the tech headlines? If you're listening on Spotify, look for our poll under the episode description or you can send us an email to tnbsj.com now onto the show. Welcome to Tech News briefing. It's Friday, April 18th. I'm Victoria Craig for the Wall Street Journal. A show today about marketing and tech and the limits of both. A US Federal judge has ruled that Google operates an illegal ad monopoly. We'll look at what that and other anti competition cases could mean for the company's future then. Do we trust artificial intelligence enough to design entire marketing campaigns? We'll look at the ad people who do. But first, for the second time in eight months, a US Judge has labeled Google an illegal monopolist. A US District judge said yesterday that the tech giant's dominance in two parts of the online ad industry harms both advertisers and consumers and deprives rivals of the ability to compete, though she rejected a third accusation by the Justice Department. Let's dig into the ruling and what it could mean for Google and its parent company, Alphabet. Jan Wolf is the Wall Street Journal's business and legal affairs correspondent. First Jan, walk us what the U.S. federal judge's decision was for Google.
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Patrick Coffey
It's a pretty forceful victory for the government. The judge agreed that Google has an unlawful monopoly in two distinct markets, servers and publishers. Basically, there's two different sorts of tools that are used to place ads online where Google is just dominant and it achieved that domination unlawfully. And it matters because now that there's this finding of liability, the next phase is for the same judge to hold a remedies trial where she would decide here is some sort of the judicial remedy I can impose that would restore competition. And in the worst case scenario, Google would have to sell off some of its advertising products, which are really a cash cow for the company. Ad Tech generated 31 billion in revenue last year, or about a tenth of the company's overall sales. So, you know, the stakes are really high for Google here.
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Unnamed Host
This is not the first time that Google has been labeled a monopolist in the US how will both Google and the Justice Department move forward with these cases?
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Patrick Coffey
Google is under so much antitrust scrutiny that it's hard to keep track of it all. But basically the way to think of it is that the Justice Department brought two different cases. One about the Google search engine saying that's an unlawful monopoly, and then another one about ad tech tools, software that's kind of not really used by the general public, but is enormously important for placing advertisements online. And so now we have rulings of liability in both cases, one in D.C. and one in Virginia, and the government won in both cases.
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Unnamed Host
And you mentioned all of the regulatory scrutiny it's under. It's not just in the U.S. but we've seen this week alone that it's facing antitrust concerns on three different continents. We have one in the UK that alleges that Google overcharged companies there for ad services. And in Japan, a regulator also ordered the company to stop what it called anti competitive practices in mobile search. Jan, is this kind of scrutiny par for the course for a company as huge and as integrated into Internet search and all of these functions that we use on a daily basis, or is.
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Jan Wolf
This something that could cause real questions.
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Unnamed Host
About how it operates in the future?
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Patrick Coffey
This antitrust scrutiny is a major threat to Google's business. I don't think they would dispute that. Online platforms have tremendous power over the public square and tremendous access to our data. Because of that. You saw a crackdown in recent years. It's sort of an area of bipartisan agreement. And now we're moving to the phase where we kind of find out, okay, well, what's going to happen? And it's moving slowly because these are enormously complex cases involving like expert witnesses, tons of fact witnesses, like former executives who get on the witness stand and testify. What we're seeing now is it's coming to a head and it's not going particularly well for Google.
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Unnamed Host
And you mentioned in the very beginning that there's potential that Google could be forced to sell off some of its business. How likely is that looking and what does it mean for Google when it comes to competition in these broader markets of search and advertising?
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Patrick Coffey
So, you know, it would be a major setback for Google, but there's still a lot of litigation left to come. You know, we have findings of liability against Google from two federal judges, but both of those Decisions are going to be appealed. There's also potential for a settlement that is negotiated in a way where it's not that burdensome for Google. And I should point out that, you know, these judges have to also consider whether the facts have changed since these cases were brought. For instance, you know, you could be a monopolist based on conduct from five years ago, but then a judge might say, well, you know what, the market's changed a lot because of say AI, because of new competition. And I am reluctant to do anything that might squelch innovation.
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Unnamed Host
We should also mention Google's response to all of this. In some of these cases, particularly in the overseas cases, they've said that they're going to vigorously defend themselves and that they disagree with some of these findings. What is Google's stance on the ruling.
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Patrick Coffey
In the US So Google said it's pleased that some of the Justice Department's theories were rejected. I mean, for example, Justice Department said that there were three different distinct markets at issue and it wasn't able to prevail on all three. It prevailed on two. And Google says it's going to keep trying to chip away at this case on appeal. And another strategy would be to try and convince the judge to not impose too extreme of a remedy.
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Unnamed Host
What does this mean for consumers? I mean, you and I who go and we search on Google every day, will we see an impact to any of these decisions if it does come to Google ending up with a forced breakup of its business?
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Patrick Coffey
So in the ad tech case that has now resulted in a ruling, a lot of the trial testimony was from executives within the news business, like the media industry, who have said that there's real harm to the public because Google, they say, takes too large of a cut of digital advertising on the web. So you know, according to the government, if we see some real remedies here for Google, what's going to happen, at least in their view, is that you'll see different media companies or just different, you know, website based companies making more money and because of that being able to offer better services and products to the public.
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Jan Wolf
That's Jan Wolf, WSJ business and legal affairs correspondent and a heads up. The Wall Street Journal's parent company News Corp. Has an outspoken critic of Google and was among the companies that were contacted by antitrust investigators. Meanwhile, at the intersection of tech and marketing, AI is coming for Madison Avenue. After the break, we'll explain how humans are the ones lending AI a helping hand to make ads, not the other way around.
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Patrick Coffey
Foreign.
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Unnamed Sponsor
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Jan Wolf
A little background for this next story before we called up the reporter, the calendar invite we used decided to attach an illustration of a coffee pot. That's because the reporter is Patrick Coffey. He's a marketing and advertising reporter for WSJ's CMO. Today, it seems the scheduling software saw the word coffee and thought, that makes sense. So given that, should we be trusting artificial intelligence to design and execute marketing campaigns for big brands? Patrick has been looking into exactly that question. Patrick, we'll get to whether marketers should hand over the keys to AI in a second, but first, can you just explain why they would even want to do that in the first place?
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Victoria Craig
Well, essentially, marketers have a constant demand to produce more content. One of the main reasons is that a big part of marketing strategy now is to personalize everything, going from addressing each customer by name to using the data that they've collected to customize whatever you're showing them based on where they're located, what they buy, the interest they've expressed through their online behaviors, and things like that. So marketers are increasingly turning to generative AI tools and they do everything from creating websites to straight up generating ideas for campaigns and now making videos.
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Unnamed Host
The thing that I'm really struck by in your story is that it isn't just AI assisting humans in this process. It is exactly the opposite of that.
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Victoria Craig
Yeah, that's fascinating. That's from Opela, which is the consumer products division of Sanofi. They just have like an entire team of AI trained people and their chief growth officer told me that they don't really tweak the output of the AI. They don't look at an image and say, oh, that's the wrong color or oh, you know, we need to make that figure look a little different because by the time you can change one little thing, the AI will have produced so much more that you can just kind of pick from what comes out. And there's obviously they have people who do fact checks, especially because they're in a highly regulated industry, so they can't have things that are medically inaccurate in their content, but they've gotten it so that in their minds, it's so refined that all they really have to do is just wait for it to churn out stuff and then they kind of pick from the results.
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Unnamed Host
So how do these companies actually train these AI systems? Because we talk a lot on the show about training AI to do this or that, but what does it actually take? What are the inputs that these companies, like Sanofi is using to trust these AI machines enough that they can do these ad campaigns essentially solo?
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Victoria Craig
A lot of it is just the material that's already been released by the companies. It doesn't take that much. They'll feed it, like three or four campaigns that this brand did recently. And as they create more stuff, they feed it more prior material. But what they say is just so well attuned to whatever they feed it that it then acts as this particular brand at the same time. That creates the issue. How does the average consumer trust what they know to be AI generated? And from the advertiser's perspective, how effective will this be in convincing you or I to buy the product? People see something, and especially if they know that it's AI, they'll be looking for these imperfections, and they'll kind of be skeptical of it.
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Jan Wolf
That was Patrick Coffey, a reporter for the Wall Street Journal's CMO Today.
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Unnamed Host
And that's it for Tech News Briefing.
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Jan Wolf
Today's show was produced by Julie Chang and Pierre Bienname. I'm your host. Victoria Craig. Jessica Fenton and Michael Lavalle wrote our theme music. Our development producer is Ayesha Al Muslim. Scott Salloway and Chris Sinsley are the deputy editors. And Falana Patterson is the Wall Street Journal's head of news audio. We'll be back this afternoon with TNB Tech Minute. Thanks for listening.