Google, IAC Battle Over Marketing Practices

Google Weighs Penalizing IAC

Google (GOOGL) Chrome’s trust and safety team has accused IAC/InterActive Corp. (IAC), a leading media and internet company, of misleading customers about its browser extensions on Google Chrome. While Google has not yet taken action on the report, investigators have recommended that Google immediately remove and deactivate IAC’s browser extensions from the Google web store.

Google’s investigation found that IAC did not give users clear information about its browser extensions. For context, these browser extensions provide manuals, government forms, and other external applications that run inside the Chrome browser. Investigators discovered that downloading IAC extensions can change a user’s default search engine from Google to IAC-owned MyWay.com.

What This Mean for IAC

Google’s report claims that IAC engaged in what is called “browser hijacking,” a practice antivirus companies have said is unethical. It involves changing a user’s browser settings without their expressed consent and understanding. For example, the Google report described an ad campaign using search terms like “how to vote” and “vote by mail,” but when users clicked on the links, instead of providing information about voting, the ad changed users’ default search engines to MyWay and installed an IAC-owned toolbar on users’ browsers. According to the audit, which IAC disputes, “IAC’s business model appears to rely almost exclusively on unintentional installs.”

IAC owns online products like Investopedia and Angie’s List, but advertising with Google made up over a quarter of the company’s overall revenue last year. Google Chrome users downloaded IAC browser extensions over 150 million times in 2019, earning the company $291 million in revenue. If Google does decide to deactivate IAC extensions and remove those extensions from the web store, IAC executives say that will severely harm the company.

Antitrust Concerns for Google

Google may be hesitant to take action against IAC because a clamp down could highlight the tech giant’s power over internet advertising right when it is in the spotlight for alleged antitrust violations. Though IAC’s MyWay search engine has a much smaller market share than Google’s own search engine, the two are competitors in some categories.

In October, federal prosecutors filed a lawsuit against Google for antitrust violations related to its search product. The company is also up against antitrust investigations at the state level and abroad. It will likely proceed with caution as it decides how to handle its relationship with IAC in an effort to avoid more antitrust probes.

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