Google Ad Practices Under Double-Whammy Scrutiny

By now, most people know their browsing history, online transactions and digital communications are monitored by tech companies hoping to use that information to sell ads. No firm is better at that than Google; the company built a technological empire on a foundation of personal data. This week, Google's ad practices faced a pair of blows with two new causes for scrutiny brought to light.

First Blow: Mastercard Deal

News of a Mastercard deal arrived courtesy of Bloomberg this week, providing a stark reminder that tech companies can also collect information about what people do offline, too. The outlet reported that Google had since 2017 offered some of its ad partners access to "a potent new tool to track whether the ads they ran online led to a sale at a physical store in the U.S." It was able to connect those dots by combining the data it gathers online with transaction history from two billion Mastercard holders. The intent was clear: Google wanted to convince its partners that its ads were more effective than previously expected because they lead to real-world purchases.

Google is said to have paid Mastercard "millions of dollars" for access to this data, and the companies are also thought to have discussed sharing the ad revenues, but a Google spokesperson denied the existence of such a revenue-sharing agreement. Another spokesperson told Bloomberg that it "built a new, double-blind encryption technology that prevents both Google and our partners from viewing our respective users’ personally identifiable information." Mastercard also said it's only providing aggregate data, not individual transactions, as part of the partnership.

Yet, that requires consumers to take Google and Mastercard at their word regarding the privacy of their personal info. Many of those people didn't even know Mastercard was selling transaction data to companies like Google. Online tracking has largely been accepted, and many people have also grown accustomed to retailers collecting data via rewards programs, or even simply asking for email addresses or ZIP codes at checkout. But who wants to ditch their card and pay with cash just to make sure they aren't contributing to this jerry-rigged panopticon?

Second Blow: A Letter to FTC

The same day Bloomberg published its report, Senator Orrin G. Hatch (R-UT) sent a letter to the Federal Trade Commission (FTC) urging it to open a new antitrust probe into Google. Hatch's concerns reach back to the FTC's decision in 2010 to allow Google to buy AdMob and extend to recent complaints from numerous senators regarding Android's data policies. Hatch explained in his letter that all of these complaints are connected by Google's search dominance:

"Although these reports concern different aspects of Google's business, many relate to the company's dominant position in search and accumulating vast amounts of personal data. That is why I also write to urge the [FTC] to reconsider the competitive effects of Google's conduct in search and digital advertising. As I explained in a speech last year, the procompetitive aspects of conduct should be weighed against its anticompetitive potential. I have no doubt that the career staff, you and the other new FTC commissioners can and will do that here. In the past, Google has offered arguments that its conduct is procompetitive. And Google does have a long track record of providing valuable services and making important, innovative contributions. But much has changed since the FTC last looked at Google's conduct regarding search and digital advertising."

Google is no stranger to complaints like this. It has repeatedly come under scrutiny from various regulators for using its dominance in online search for its own benefit while also stifling competitors. Yet, previous investigations from the FTC have cleared the company of wrongdoing--at least partly because it was too hard to prove malicious intent even if it seemed obvious (it probably didn't hurt that Google executives met with FTC heads, President Barack Obama and other government figures roughly once a week during the first five years of the Obama administration).

But a lot of time has passed since then, and Hatch is hoping that the new FTC leadership will take another look at Google. With increasing concerns about Android's data collection, Google's continued leadership with many of its online services and reports like Bloomberg's into secretive efforts to further expand its ability to monitor human behavior to sell more ads, it's not hard to see where Hatch is coming from.