Another day, another antitrust challenge for Google.
Yesterday, a group of senators released a letter urging the Justice Department and the FTC to investigate whether Big Tech companies releasing generative AI tools are threatening publishers and their ability to make money off of ads. While Meta and Google were both name-checked in the letter, this really feels like another uppercut to Google, given the letter’s references to search.
“While a traditional search result or news feed may link users to the publisher’s website,” the letter reads, “an AI-generated summary keeps users on the original search platform, where that platform alone can profit from the user’s attention through advertising and data collection.” This, according to the senators, “threatens the ability of journalists and other content creators to earn compensation for their vital work.”
Why This Matters:
Zero-click searches give you information directly on the search engine results page without the need to visit other websites. It was introduced for user convenience and had been growing in search volume even before the advent of Gen AI. A 2019 Jumpshot study, for example, found that over half of Google searches resulted in zero clicks. Now, with the rise of gen AI, zero-click results could become the norm.
Legacy search companies like Google and Microsoft are either adding gen AI into their existing search experiences or have launched separate Gen AI tools with search capabilities. Both approaches keep users within the Big Tech company’s search ecosystem, reinforcing their walled garden. In doing so, they can boost exposure to advertising on the platform.
Obviously, this is not good. It hurts publishers and non-Big Tech adtech companies by limiting their ability to make money from advertising on the open web. Advertisers also suffer as Big Tech gains even more control and can dictate pricing for the limited ad opportunities they do permit in Gen AI searches. (And Gen AI search ad pricing is all over the place.) Moreover, the opaque nature of Gen AI algorithms makes it hard for marketers to truly optimize their content and strategies.
Experts React:
The senators’ letter concluded: “For the reasons outlined above, we urge the Department of Justice Antitrust Division and the Federal Trade Commission to investigate whether the design of some generative AI features, introduced by already dominant platforms, are a form of exclusionary conduct or an unfair method of competition in violation of the antitrust laws.”
Our Take:
Look, Gen AI search is kind of a mess for the ad industry. No one really knows how any of it works. We recently wrote about Gen AI search in TikTok, for example, where certain brands were prioritized or recommended over others. This is basically the Wild West, and regulators expressing interest in what is occurring will hopefully force Big Tech companies to be more transparent with the ad industry. At the same time, regulators overreaching on Gen AI could stifle innovation at a critical moment. Balancing oversight with the freedom to innovate will be key.
