The U.S. Department of Justice and eight states on Tuesday filed an antitrust lawsuit against Google for ‘’monopolizing multiple digital advertising technology products’’.
The news came just hours after sources familiar with the matter told Bloomberg that the Justice Department was set to take action against Google’s advertising business, which drives nearly 80% of its revenue.
The DOJ is joined by the Attorneys General of California, Colorado, New York, New Jersey, Connecticut, Virginia, Tennessee, and Rhode Island.
The lawsuit, which was filed in the U.S. District Court for the Eastern District of Virginia yesterday, alleges that ‘’Google has 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. Having inserted itself into all aspects of the digital advertising marketplace, Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies.’’
It adds that Google is now in control of the technology that almost all the major website publishers use to offer ad space, main tools that advertisers use to buy that ad space, and also the largest ad exchange connecting publishers and advertisers.
‘’Google’s plan has been simple but effective: (1) neutralize or eliminate ad tech competitors, actual or potential, through a series of acquisitions; and (2) wield its dominance across digital advertising markets to force more publishers and advertisers to use its products while disrupting their ability to use competing products effectively,’’ the plaintiffs said.
‘’The harm is clear: 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.’’
The Justice Department and eight states request the Court to ‘’order the divestiture of, at minimum, the Google Ad Manager suite, including both Google’s publisher ad server, DFP, and Google’s ad exchange, AdX’’.
Following the news, Google’s Vice President of Global Ads Dan Taylor shared a blog post accusing the lawsuit of ignoring ‘’the enormous competition in the online advertising industry’’.
He highlighted how; Microsoft acquired ad platform Xandr last year enabling it to become Netflix’s advertising partner, Apple is reportedly building its own DSP and its ad business is expected to hit $30 billion in the next few years, Amazon’s ad business is growing faster than that of Google and Meta, TikTok has reportedly surpassed $10 billion in ad revenue after 5 years of its launch outside of China, and other companies like Disney, Walmart, Target and Comcast are all investing in their ad tech services.
‘’Government shouldn’t pick winners and losers in a competitive industry,’’ he said.