(Image: Tom Red/Private Media)

Game over. Google has pretty much wrapped up the global monopoly of digital advertising, first through its domination of search and now through controlling the technology that delivers display ads across the open web.

Facebook lags Google but dominates the so-called closed web through its social platforms, including Instagram, and is starting to elbow into classified advertising, which in Australia is dominated by News Corp’s REA Group and Nine’s Domain.

No sign of it stopping, either. According to the latest report on big tech released this week by the Australian Competition and Consumer Commission, Google is using its monopoly power to both crush potential competitors and increase its clip of the growing digital ad spend.

We’ve ended up with a functional web that’s largely “free”. That’s good. But we’re paying the price of that ad-supported web with data surveillance matched with clickbait and fake news. Take anything you hate about the web, and blame it on the corporate decision made by the Silicon Valley giants to provide both search and social as free services paid by advertising.

It’s not just the Silicon Valley cultural sphere. It’s happening in China’s splinternet, too. As Ling Huawei, managing editor of China’s leading business masthead Caixin Global, put it in economic speak this month, the country’s high-profile antitrust crackdown on social platforms is “aimed at correcting their negative externalities while safeguarding their positive externalities”.

The Chinese authorities have greater power to bring their tech platforms to heel, and greater willingness to exercise that power as the country’s tech titan Jack Ma found to his cost when he attacked the country’s financial regulators for stifling innovation.

What to do? Digital has taken over advertising so suddenly — and the big tech players have moved so quickly — that it looks like the regulatory frog at the bottom of the internet pot was well and truly boiled before it could jump free.

More players — greater competition — with the same flawed advertising model underpinning it is unlikely to help. The choices are to regulate as tightly as possible, like a public utility, or to break up the tech giants to diminish their power.

The latest ACCC report recognises that from an Australian perspective the damage has been done: it recommends greater enforcement with increased transparency about just how the advertising technology works and more public detail on the various charges levied as ads work through the companies’ secretive platforms.

In the US, meanwhile, Google is facing four antitrust actions by state and federal authorities, with growing support to force Google to separate its search and ad tech arms and for Facebook to separate its platforms, particularly the core News Feed and Instagram.

Jiu-jitsu style, Google is turning the regulatory pushback against the demand for greater privacy into its proprietary “Privacy Sandbox” which, ahem, respects your privacy by grouping you into lookalike clusters for target advertising purposes.

Of the $10 billion spent on digital advertising in Australia, the ACCC says that Google already takes almost all of the 45% that goes to search. On top of that, it found that almost all the $2.8 billion that is spent on display ads on the open web — increasingly video, increasingly mobile — is funnelled through Google’s ad tech and a disconcertingly high proportion of it ends up with Google’s own YouTube.

The ACCC estimates that Google clips about 27% of this spend as the ad travels tech-step by tech-step from advertiser to publisher. Doesn’t leave much of those ad dollars to support actual content that people want to see.

Facebook, meanwhile, takes most of the $3.8 billion that goes through proprietary social platforms (aka “the closed web”). Those Facebook dollars are under threat as Apple has restricted the company from scraping data of activity on the iPhone outside the FB app, making their advertising much less compelling than the offering of the more detailed Google data.

The platform is attempting to compensate by muscling into the $1.6b billion classified advertising through its Marketplace. So far, this is focused on personal sale ads (which can be free or upgraded to paid). In the US, it’s damaged stand-alone classified ads sites, with Craigslist, for example, seeing its income falling by about half.

Looks like the platforms have more bad news for Australia’s old media.