Under Investigation For Antitrust Abuse, Trump DOJ Rubber Stamps Major Ad Industry Consolidation

Legal Issues

from the bigger-must-be-better dept

While the Trump administration and its allies (like Josh Hawley) like to talk a lot about monopolization in “big tech,” they couldn’t actually care less about monopolies or their impact on competition. For example while Hawley and the Trump FCC/DOJ have made an endless stink about the power of “big tech,” that’s largely for performative political reasons, namely to perpetuate the utterly false claim that Conservatives are being “censored,” to bully tech giants away from encryption, or to frighten them away from finally doing something about the (profitable) bigotry and disinformation problems that plague their networks.

Oddly, this performative, sometimes vindictive nonsense is often conflated with actually caring about monopoly power and reforming antitrust. You only need to look at the DOJ and FCC’s mindless rubber stamping of every fleeting whim of the US telecom industry, one of the most heavily monopolized (and widely despised) sectors in technology. While T-Mobile was getting the red carpet rolled out for its competition and job killing merger with Sprint, Bill Barr’s DOJ was busy hassling small cannabis companies, or filing empty-headed “antitrust” lawsuits against automakers for agreeing to limit emissions.

Studies from the likes of the Antitrust Institute (pdf) have made it very clear: the Trump administration’s interest in “antitrust reform” is utterly and completely hollow. During an era when lagging antitrust enforcement needed to be meaningfully improved and reformed, the Trump administration instead began wielding antitrust as a political bludgeon to gain leverage over its enemies and dole out favors to its allies. It’s mindless theater and an abuse of the law, yet it’s often portrayed as serious adult policy making by many experts and the press.

Despite ongoing whistleblower investigations of Barr’s politicization of antitrust, his DOJ is now rubber stamping the merger between native advertising platforms Taboola and Outbrain. EU and UK regulators have been scrutinizing the deal, arguing it will erode competition in the native advertising (read: clickbait) space, resulting in notably worse terms for already struggling publishers who face getting an even smaller share of advertising revenue:

“The Competition and Markets Authority said it has concerns the merger will result in a substantial lessening of competition and that it will investigate further unless the businesses take steps to address them…Many national and local news websites in the UK use one of the two services and the CMA said a ?large proportion? of the publishers it contacted as part of its initial investigations were concerned about the potential impact of the deal.”

More specifically, UK regulators say the combined companies would enjoy an 80% market share for the clickbait online recommendations market:

“Taboola and Outbrain are the 2 largest providers of content recommendation services to publishers in the UK, with a combined market share of over 80%. They supply very similar services and are each other?s main competitor. In particular, the companies? internal documents and information received from publishers showed the strong competition between the companies.

If the merger were to go ahead, the CMA is concerned that publishers in the UK will have a reduced choice of supplier for content recommendation services. This could result in a worsening of terms for publishers and a reduction in their share of advertising revenue. A large proportion of the publishers contacted by the CMA were concerned about the impact of the deal if it goes ahead.”

Many in the marketing sector have echoed those sentiments, stating the only thing the merger really accomplishes is creating a “gigantic vortex of crap”:

In contrast there’s been little to no serious scrutiny by the Barr DOJ, which apparently didn’t spend too much time thinking about the deal’s potential pitfalls:

“The Taboola-Outbrain merger had been proposed by the companies? executives as way for publishers to monetize digital content outside of Big Tech?s monopolies. But some publishers Adweek has been talking to question how the merged company would be structured and what sort of terms it would offer publishers.

?What will be interesting is what happens to yield?? a publishing source told Adweek. ?Will this be an improvement? Will the joined forces allow more yield to flow through to publishers? Or does this actually remove some competition in such a way that yield suffers? I don?t know.?

Now, maybe the Trump DOJ seriously looked at this deal intelligently and greenlit it based on adult policy making (they’ve yet to explain the approval). But based on what we’ve seen in the last year or two (like DOJ antitrust boss Delrahim using his personal phone and text message accounts to personally guide T-Mobile to merger approval, something, it should go without saying, antitrust enforcers should not be doing), that’s giving them too much credit. It could really be as simple as the fact that Taboola execs told the DOJ this might potentially challenge “big tech,” and that was enough for them.

That’s the problem when you start abusing legal authority with reckless abandon–you lose any trust or faith in the idea that your decisions are actually being based on the data.

Filed Under: antitrust, competition, doj, monopoly, online ads