Google is facing a lawsuit from the US Department of Justice and eight states over its alleged monopoly on the digital advertising market. The company is accused of abusing “monopoly power” to the detriment of sites and advertisers that use other advertising tools. The lawsuit was signed by 8 states, including New York, California, Connecticut and Virginia.
“Google’s anticompetitive conduct raised barriers to entry to artificially high levels, forced key competitors out of the ad technology tools market, persuaded potential competitors to enter the market, and marginalized and unfairly disadvantaged Google’s few remaining competitors,” the lawsuit states.
The lawsuit further alleges that Google’s various acquisitions have allowed it to “neutralize or eliminate” competitors. In addition, Google allegedly forced other companies to use its tools. It goes on to say that when the alleged anticompetitive actions are added up, “these interrelated and interdependent actions had a cumulative and synergistic effect that harmed competition and the competitive process.” Additionally, the DOJ states that Google “receives, on average, more than 30% of advertising dollars that flow through digital advertising products.”
Google responded to the lawsuit with a blog post. The company says the Justice Department is using two previous acquisitions, made more than a decade ago, as an attempt to “rewrite history at the expense of publishers, advertisers and Internet users.” It is also said that the Ministry of Justice “incorrectly characterizes” the work of advertising offers. It is noted that Google does not force customers to use its solutions, and people prefer them “because they are effective.” Google also names other companies that are thriving in the advertising industry, including Microsoft, Amazon, Apple and TikTok.
Google’s vice president of global advertising, Dan Taylor, also wrote that the lawsuit “in many respects duplicates the baseless Texas attorney general’s lawsuit, much of which was recently dismissed by a federal court.”
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Google knew what could happen. Last year, the company tried to avoid a possible lawsuit from the Justice Department by offering to separate its ad auction business, which sells and places ads on customers’ sites, from Google’s digital advertising division. But instead of making such a business a separate company, it was proposed to transfer the division under the auspices of parent company Alphabet.
This and other concessions offered by Google were not enough to convince the Justice Department that it was not engaging in anticompetitive practices. The department’s lawsuit includes a request to the court to force Google to abandon its advertising business.
It should be noted that this is not the first attempt by the authorities to influence Google’s advertising business. The US Department of Justice sued Google on similar grounds in 2020, accusing the company of illegally monopolizing the search and advertising markets. The agency then asked the court to “loosen Google’s control over the distribution of search so that competition and innovation can take hold.” Also, in the same year 2020, an alliance of 165 Internet companies and industry associations called on EU antitrust authorities to crack down on Google over its antitrust behavior. Even before that, the EU wanted to divide Google’s business into search and everything else.
Source: The Verge
