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Antitrust concerns in Ad-Tech: formalizing the combined effect of multiple conducts and behaviours

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  • Oliver Latham
  • Mikaël Hervé
  • Romain Bizet

Abstract

We present an economic model of competition in the ad tech “stack”. We use this model to understand how the complex web of conducts implemented by Google – and under scrutiny by both U.S. and European antitrust enforcers – can be rationalized as a profit-maximizing, exclusionary strategy. We show how vertical integration, linking of services across the stack and the use of complex auction models increases incentive and ability to foreclose rivals and why there might be incentives to limit data and ID sharing so as to undermine rival intermediaries. We show how these conducts can have negative effects on consumer welfare via an increase in the prices paid by online advertisers and a decline in incentives to invest in producing content. We discuss also the level of “take rate” charged by different intermediaries and explain how differences in the ability to price discriminate undermines the relevance of such comparisons.

Suggested Citation

  • Oliver Latham & Mikaël Hervé & Romain Bizet, 2021. "Antitrust concerns in Ad-Tech: formalizing the combined effect of multiple conducts and behaviours," European Competition Journal, Taylor & Francis Journals, vol. 17(2), pages 353-390, May.
    • Handle: RePEc:taf:recjxx:v:17:y:2021:i:2:p:353-390
    DOI: 10.1080/17441056.2021.1893960
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    Cited by:

    1. Federico Etro, 2023. "Hybrid Marketplaces with Free Entry of Sellers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 62(2), pages 119-148, March.

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