Posted by on January 25, 2023 2:46 pm
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Google sued for monopolizing ad technology, using ‘anticompetitive practices,’ DOJ lawsuit claims

On Tuesday, the Department of Justice and eight states filed a lawsuit against Google accusing the technology giant of abusing its monopoly over online advertising, the New York Times reported.

According to the lawsuit, Google “corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers and brokers to facilitate digital advertising.”

This lawsuit marks the fifth case the DOJ has filed against Google since 2020, and it is the agency’s first antitrust suit against the tech company since Biden took office.

Virginia, California, Colorado, Connecticut, New Jersey, New York, Rhode Island, and Tennessee joined the Justice Department’s lawsuit.

The suit aims to force Google to sell parts of its advertising business, which generated $54.5 billion in the third quarter of 2022. It also requested that the court prevent the tech giant from engaging in “anticompetitive practices.”

The DOJ argued that Google plays multiple sides of the digital advertising market and “set[s] the rules of the game to exclude rivals.”

“By becoming the dominant player on both sides of the digital advertising industry, Google could also play both sides against the middle,” the complaint explained. “It could control both the publishers with digital ad space to sell, as well as the advertisers who want to buy that space. With influence over advertising transactions end-to-end, Google realized it could become ‘the be-all, and end-all location for all ad serving.'”

The lawsuit argued that the danger of Google’s monopoly on digital advertising is that “website creators earn less, and advertisers pay more, than they would in a market where unfettered competitive pressure could discipline prices and lead to more innovative ad tech tools that would ultimately result in higher quality and lower cost transactions for market participants.”

According to the DOJ, one digital advertising executive at Google questioned the company’s power over the industry.

“Is there a deeper issue with us owning the platform, the exchange, and a huge network? The analogy would be if Goldman or Citibank owned the NYSE,” stated the Google executive, according to the lawsuit.

Google posted a blog article Tuesday in response to the DOJ’s allegations.

“Today’s lawsuit from the Department of Justice attempts to pick winners and losers in the highly competitive advertising technology sector,” wrote Vice President of Global Ads Dan Taylor.

“It largely duplicates an unfounded lawsuit by the Texas Attorney General, much of which was recently dismissed by a federal court,” Taylor continued. “DOJ is doubling down on a flawed argument that would slow innovation, raise advertising fees and make it harder for thousands of small businesses and publishers to grow.”

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