The Adwords API and Google's Monopoly

The Google Commercial Developer Program has been replaced before it even started. Although we commercial developers have been curious since the January 1, 2006 launch date for the CDP came and went, the broken link on the site suggested changes were coming.They finally have.

25 cents per 1000 quota units consumed. That's a lot more than we pay at Yahoo, but it's not so high as to be completely ridiculous.

The terms of service, though, are pretty ridiculous. I'd say right up there with Microsoft not allowing competitive browser icons on the Windows desktop. My guess is that the terms are so far over the top that they're the result of over-lawyering and not the result of bad intentions at Google. If they aggressively enforce everything, I think they'll run into antitrust issues. They'll win, certainly, but that used to be a line they didn't approach.

It feels a bit like Aspen Skiing to me. There a bigger ski resort stopped honoring all-mountain passes sold by a smaller resort (and purchased at retail price by the smaller resort). Winning a monopoly by building a better product isn't bad at all, but acting to maintain that power in an anticompetitive way is. It feels like Google is heading that direction with these TOS.

Especially egregious pieces:

1.      Inputs Fields. The AdWords API Client must not show in the same area of a page, or otherwise visually or functionally associate, any input fields for collecting or transmitting AdWords API Campaign Management Data with the content of Third Parties or input fields for collecting or transmitting data to Third Parties.

So making it easy to bid at Google is fine, but not if you make it easy to bid at Yahoo – even though Google still sells its ads at full price in that app? That feels anticompetitive and is what reminded me of Aspen Skiing.

2.      Campaign Management Data Storage. All AdWords API Campaign Management Data must be stored separate from Third Party advertising network data. Additionally, AdWords API Campaign Management Data may not be stored in a manner that is associated (through relational data structures, links or otherwise) with Third Party advertising network data.

This one is especially insidious. A term that makes it more expensive for people to even design applications that work on multiple networks? I have no idea how this could have any motivation other than anti-competitiveness. Google is certainly not harmed by how companies store their data. This feels as aggressive as anything Microsoft ever did, and even more invasive to other businesses.

(My disclaimer: I did poorly in antitrust in law school, I've made no attempt to think about the market power arguments and such, and I know Aspen Skiing can be distinguished on a thousand grounds. To me, this is about feel, though, and how "do no evil" seems to be fading a bit, at least within Google's legal team. The individual people I know there don't reflect at all the aggressive values inherent in their API TOS).

Related Tags: google, adwords, api, sem, search engine marketing