The Open Display Advertising Ecosystem: Competition Concerns and Policy Interventions

This paper investigates Google’s potentially anticompetitive practices, such as self-preferencing, discrimination against rivals, and leveraging its dominance in the ad tech industry, which, as we argue, have led to barriers to entry, distorted competition, and negatively impacted other stakeholders in the ad tech value chain. To foster a more equitable and competitive landscape, we discuss policy interventions that combine structural separation of Google’s ad server function from its remaining ad tech services and ensuring non-discriminatory access to essential inputs on the demand-side, like unbundling exclusive access to first-party inventory from Google’s demand-side platform (“DSP”) services. These measures aim to mitigate market power, preserve efficiency gains from vertical integration, and benefit publishers and advertisers. Increased competitive pressure for ad exchanges and DSPs will likely spur innovation and decrease price levels. Implementing these policy interventions requires regulators and policymakers to carefully balance the benefits of promoting competition with the potential costs of disrupting efficiency gains and technical synergies offered by Google’s integrated services, ultimately aiming for a more transparent, competitive, and innovative ad tech landscape that serves the best interests of all stakeholders.

By Alexander Witte & Jan Krämer^[1]

I. INTRODUCTION

Online advertising has transformed the way businesses promote pr