 When most people think about advertising, they might picture a scene out of madmen, stuffy business types in suits, cutting big dollar ad deals in dimly lit rooms. But today, advertising hardly looks like that at all. In the US, 85% of display ads are sold on automated exchanges. No suits, no deals, no dim rooms. And those automated exchanges are dominated by a single massive player, Google. The biggest names in tech, and in particular ad tech, have come under scrutiny from governments across the world over the past decade. Primarily, this is centered on the use of consumer data in what is popularly known as the surveillance economy. But increasingly, regulators are looking at the overall health of the advertising market. Digital advertising is set to generate $135 billion in revenue in 2020. And while this may represent a high note in an otherwise grim economy, critics point to the fact that growth in the broader sector is dominated by three household names, Amazon, Facebook, and Google. According to forecasts from eMarketer, these three companies will collectively account for 62% of US digital ad spend. Google alone, the largest of the three in terms of budgets, will pocket 29% of ad spend. Now, regulators in the US would poise to sue Google over its grip on advertising markets. So how did we get here? To get to the core of the criticisms leveled at Google, we need to go back to the early days of the online ad market. We'll draw on an academic paper titled Why Google Dominates Advertising Markets by Dina Srinivasan, a fellow with the Thurman Arnold Project at Yale University to explain some of the arguments that Google may soon face in court. First, how online advertising now resembles the stock market. The vast majority of online ad space is now traded automatically in what's called programmatic advertising. These ads are bought and sold in real time using algorithms fed by data. Deals take place on ad exchanges in much the same way that shares of a company are traded on stock markets. According to Srinivasan, electronic ad buying started happening around 2004, the very same year the New York Stock Exchange merged with a major electronic trading platform. Today, the majority of trades for online ad space take place on these centralized electronic exchanges. But to conduct a trade on an ad exchange, you can't just do it directly. Buyers and sellers require middlemen, or brokers, just as they do in stock markets. Both sides of a trade require their own intermediaries, demand side platforms or advertisers, and supply side platforms or ad servers for media owners. This is a lot like how someone buying a share in, say, Tesla would use a brokerage platform like eTrade, Fidelity, or Robinhood, rather than buying directly from Nasdaq. Ad spaces then typically traded using a variety of different algorithmic auction mechanisms to pair up buyers and sellers and set prices. Second, how Google assembled a dominant industry juggernaut. In 2007, Google bought DoubleClick for $3.1 billion, a deal that is still the biggest in ad tech history. This deal brought the industry's number one sell side broker, DoubleClick for publishers, under Google's control. This gives Google an essential role in how all ad space is monetized. And this wasn't the end of Google's empire building. In 2009, it launched the DoubleClick ad exchange. In 2010, Google purchased demand side buying tool Invite Media. In 2018, Google retired the DoubleClick branding, but all three offerings, buying, selling, and the exchange in between, still exist, giving Google influence at every level of programmatic advertising. Third, why Google's industry presence is raising concerns. Google's dominance of the three critical parts of the online ad auction market leads some to question whether Google can operate as an honest broker. For instance, can each of these three transaction tools be trusted to represent the interests of advertisers and publishers instead of Google's own interests? Critics claim that Google's system has inherent biases that preference its own properties and tools over competing products. Srinivasan maintains that Google is taking advantage of the growing tide of data privacy laws across the globe to further close off access to important trading information to third parties. That would further cements Google's information advantage in its walled garden of digital advertising. Although this is far from the first time that Google has faced potential scrutiny from antitrust authorities, many believe the mood is different this time. In fact, Google recently opened up about the percentage it charges for online ad trades. About 30% of what advertisers spend end up in Google's pockets. Some believe growing scrutiny will lead Google to enact policy changes in the years ahead. If it wanted to, Google could voluntarily divest certain assets in the ad market to get regulators off its back. But if it doesn't, that raises the prospect of Google changing policy not by choice but by government force.