Justice Department files antitrust lawsuit against Google over digital advertising
Written by ABC Audio. All rights reserved. on January 24, 2023
(WASHINGTON) — The Justice Department and eight other states filed a historic antitrust lawsuit Tuesday targeting Google over what they allege is the Big Tech giant’s monopoly over the online advertising market.
“Monopolies threaten the free and fair markets on which our economy is based,” Attorney General Merrick Garland said at a press conference on Tuesday. “They stifle innovation, they hurt workers and producers and they increase costs for consumers.”
“No matter the industry and no matter the company, the Justice Department will vigorously enforce our antitrust laws,” Garland added.
The lawsuit, filed in the Eastern District of Virginia, aims to break up Google’s dominance in the online ad marketplace by compelling the company to divest its Google Ad Manager suite. The lawsuit also seeks an order from the court prohibiting Google from engaging in any of the anti-competitive practices outlined in the case.
“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,” according to the lawsuit.
The action seeks to “halt Google’s anticompetitive scheme, unwind Google’s monopolistic grip on the market, and restore competition to digital advertising,” the lawsuit said.
DOJ is joined in the lawsuit by California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia.
“Competition in the ad tech space is broken, for reasons that were neither accidental nor inevitable,” the DOJ wrote in the lawsuit. “One industry behemoth, 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.”
Google is set to take in more than 26% of all digital advertising revenue this year, according to an analysis from data firm Insider Intelligence. In total, tech giants Google, Amazon and Facebook-parent Meta will take in about 64% of the $200 billion in digital ad revenue generated this year, the study found.
Google rebuked the lawsuit’s claims in a statement to ABC News.
“Today’s lawsuit from the DOJ attempts to pick winners and losers in the highly competitive advertising technology sector. It largely duplicates an unfounded lawsuit by the Texas Attorney General, much of which was recently dismissed by a federal court,” a spokesperson said.
“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,” the spokesperson added.
Google exploits a conflict of interest, the lawsuit alleges, since the company controls the technology used to both offer and purchase advertising space, as well as the largest ad exchange on which marketers are matched with publishers.
Further, the lawsuit accuses Google of using its market power to punish companies that purchase digital ads elsewhere and charge heightened fees for clients that buy ads on its platforms.
In turn, such “anticompetitive behavior” has forced potential competitors out of the digital advertising business and sidelined businesses that remain, the lawsuit said.
“Google has thwarted meaningful competition and deterred innovation in the digital advertising industry,” the lawsuit said.
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