Senator blasts FTC for failing to crack down on Google's ad fraud problems

A US senator has blasted the Federal Trade Commission for failing to crack down on Google's lack of effort in reducing ad fraud on its advertising network.

Virginia Democrat Senator Mark Warner says Google is directly profiting by letting ad fraud run rampant at the expense of the companies who buy or sell ads on its platform.

However, Warner is just as mad about the FTC as he is about Google, claiming the FTC has failed to take action against the Mountain View-based company for more than two years since he and New York Democrat Senator Chuck Schumer first wrote the agency about Google's ad fraud problem.

"The FTC's failure to act has had the effect of allowing Google to structure its own market," said Sen. Warner in a letter sent to the FTC yesterday.

"Through a series of transactions, the company has accomplished a level of vertical integration that allows it in effect to act as the equivalent of market-maker, commodities broker, and commodities exchange for digital advertising -- in the process creating a range of conflicts of interest," he said.

"While the company controls each link in the supply chain and therefore maintains the power to monitor activity in the digital advertising market from start to finish, it has continued to be caught flat-footed in identifying and addressing digital ad fraud."

Sen. Warner also called out Google for proving unwilling to address misuse of its advertising platform for the "rampant proliferation of online disinformation" --referring to how various foreign entities have used Google ads to push political agendas, both in the US and other countries of the world.

"As long as Google stands to profit from the sale of additional advertisements, the financial incentive for it to voluntarily root out and address fraud remains minimal," Sen. Warner added.

Both Google and the FTC have not replied to requests for comments for this article. Google did publish a blog post after our inquiry entitled "Tackling ads abuse in apps and SDKs" that described the company's latest efforts in addressing Android and Google Play Store ad fraud, which has been a serious problem for the company in the last few months.

This is the third letter Sen. Warner has sent the FTC about Google's ad fraud problem. He sent a first in 2016, another one in October, and a third yesterday.

In yesterday's letter, Sen. Warner also criticized the FTC's reply to the second letter. In its answer, available here, the FTC told Sen. Warner that they don't have the authority to go after Google for its practices, but instead opted to tackle online ad fraud through "workshops and education campaigns."

Sen. Warner disagreed and reminded the FTC that they themselves lobbied Congress for additional authority related to online businesses and the digital age, which they received.

"Section 5 of the Federal Trade Commission Act was written in broad terms precisely for this purpose," Sen. Warner said.

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