What you need to know
- Alphabet CEO Sundar Pichai has released his opening remarks defending Google's advertising business ahead of the House Judiciary hearing on Wednesday.
- Pichai argues that Google's continued success is not guaranteed in today's competitive landscape.
- He also claims competition in the digital ad marketplace gives consumers "an enormous amount of choice" and has led to a 40% decline in advertising costs over the last decade.
The chief executives of Amazon, Apple, Facebook, and Google are set to testify before the House Antitrust Subcommittee on Wednesday, as part of a broad antitrust investigation against the big tech companies. Ahead of the hearing, Alphabet CEO Sundar Pichai has released his opening remarks defending Google's digital advertising business.
Pichai has argued that Google's continued success in the digital ad marketplace "is not guaranteed," as the competitive landscape has changed significantly over the last five years.
Google operates in highly competitive and dynamic global markets, in which prices are free or falling, and products are constantly improving. Today's competitive landscape looks nothing like it did 5 years ago, let alone 21 years go, when Google launched its first product, Google Search.
The statement highlights how Google faces "strong competition for search queries" from businesses that are experts in their respective fields, such as e-commerce providers. Twitter, WhatsApp, Snapchat, Pinterest, and Amazon are cited as some of the competitive platforms that people are now using to get information.
For example, people have more ways to search for information than ever before – and increasingly this is happening outside the context of a only a search engine. Often the answer is just a click or an app away: You can ask Alexa a question from your kitchen; read your news on Twitter; ask friends for information via WhatsApp; and get recommendations on Snapchat or Pinterest.
Pichai added that competition in ads from companies like Twitter, Instagram, Pinterest, Comcast, and others has helped reduce advertising costs by 40% over the last 10 years, and the savings have "passed down to consumers through lower prices."
The Alphabet CEO also talked about how Google's Android platform was built to promote competition and allows thousands of companies to make and sell phones without paying any licensing fees or any requirement to integrate Google products.
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