The US Department of Justice (DOJ) has filed an antitrust lawsuit aimed at Google’s online advertising business and seeks to make Google divest parts of the business.
In the lawsuit, the DOJ and a selection of US states allege that Google sought to control all sides of the online advertising market and monopolised multiple advertising technology solutions and engaged in “a course of anticompetitive and exclusionary conduct.”
Specifically, the lawsuit said Google had eliminated competitors through acquisitions and wielded its dominance to force publishers and advertisers to use its products, and thwarted the ability of anyone to use competing products.
“Today’s complaint alleges that Google has used anticompetitive, exclusionary, and unlawful conduct to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” said Attorney General Merrick B. Garland.
“No matter the industry and no matter the company, the Justice Department will vigorously enforce our antitrust laws to protect consumers, safeguard competition, and ensure economic fairness and opportunity for all.”
This is the second antitrust suit filed against Google in just over three years. The US’ antitrust laws aim to prevent the creation of monopolies across industries and effectively prevent companies from playing gamekeeper and poacher within the sectors they operate in.
In this instance, Google’s primacy in controlling people’s access to the internet through the Chrome browser, the Android operating system, and other technology as well as dominating the online adtech market, might have given the company an unfair advantage over other adtech businesses.
“The complaint filed today alleges a pervasive and systemic pattern of misconduct through which Google sought to consolidate market power and stave off free-market competition,” said Deputy Attorney General Lisa O. Monaco.
“In pursuit of outsized profits, Google has caused great harm to online publishers and advertisers and American consumers. This lawsuit marks an important milestone in the Department’s efforts to hold big technology companies accountable for violations of the antitrust laws.”
Google’s advertising business generated US$54.5 billion in the quarter ending 30 September. However, the company’s hares were down 1.3 per cent on Tuesday afternoon. The lawsuit stated that “as a result of its illegal monopoly” Google “pockets on average more than 30 per cent of the advertising dollars that flow through” its adtech products.
It also explained that Google “controls the digital tool that nearly every major website publisher uses to sell ads on their websites (publisher ad server).” However, the lawsuit said that by controlling an 80 per cent share of advertiser ad networks through Google Ads and with Google AdExchange controlling half of the digital ad exchange market, it could stifle competition and effectively force other publishers and advertisers to use its tools.
“The Department’s landmark action against Google underscores our commitment to fighting the abuse of market power,” said Associate Attorney General Vanita Gupta.
“We allege that Google has captured publishers’ revenue for its own profits and punished publishers who sought out alternatives. Those actions have weakened the free and open internet and increased advertising costs for businesses and for the United States government, including for our military.”
“Today’s lawsuit seeks to hold Google to account for its longstanding monopolies in digital advertising technologies that content creators use to sell ads and advertisers use to buy ads on the open internet,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division.
“Our complaint sets forth detailed allegations explaining how Google engaged in 15 years of sustained conduct that had — and continues to have — the effect of driving out rivals, diminishing competition, inflating advertising costs, reducing revenues for news publishers and content creators, snuffing out innovation, and harming the exchange of information and ideas in the public sphere.”
