Google's Unfair Treatment of Advertisers Harms All Businesses

Google dominant share in search makes its paid search advertising platform, AdWords, a “must buy” for businesses that advertise online. And that gives Google a further tool for undermining competition.

The placement of ads on Google is determined through an auction in which advertisers submit bids for keywords associated with search queries. The bid is the amount that the advertiser is willing to pay each time a user clicks on its ad.

But Google handicaps each bidder with a “quality score.” The lower a quality score, the higher a price the advertiser has to bid to win the auction.

Given the opaque and subjective – and advertiser-specific – process, Google has the ability to manipulate paid search to limit competition. Numerous companies have complained about Google raising minimum bids to prohibitively high levels, without warning and with little or no justification.

Take the successful business-to-business site, SourceTool as an example.

According to The New York Times, “suddenly and without warning, Google raised Sourcetool’s minimum bid requirement from 5 or 6 cents to $1, and in some cases to as much as $5 or $10.” When SourceTool’s CEO tried to work with Google to correct the problem, he was asked in an email to “please refrain from repeatedly contacting our team.”