In its latest attempt to undermine Big Tech’s market power, the US Justice Department filed a lawsuit against Alphabet’s Google on Tuesday, accusing it of abusing its hegemony in the digital advertising industry and demanding that it surrender its ad manager suite. US sues Google for online ad business monopoly
80 per cent of Google’s revenue comes from one of the businesses that is the subject of the litigation. The Justice Department requested the court to separate its ad technology division.
“Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” the antitrust complaint said.
In response to the case, Google said that the government was “doubling down on a flawed argument that would slow innovation, increase advertising fees, and make it harder for thousands of small businesses and publishers to grow.”
The federal government has stated that it wants to level the playing field for businesses that compete with Big Tech firms like Apple Inc., Amazon.com, and Meta Platforms, the owner of Facebook.
A 2020 anti-trust case filed against Google during the presidency of Donald Trump was followed by the Democratic government of President Joe Biden’s lawsuit on Tuesday.
The trial for the 2020 complaint, which alleges antitrust crimes in the company’s acquisition or maintenance of its monopoly in internet search, is set for September.
The government was joined in its lawsuit on Tuesday by eight states, including California, the state where Google is based. Tuesday saw a 1.6 per cent decline in Google stock.
The lawsuit says “Google has thwarted meaningful competition and deterred innovation in the digital advertising industry.”
Along with its well-known, cost-free search engine, Google also generates income from its related ad tech businesses, which link advertisers with publications, websites, and other businesses seeking to host them.
The US sues Google for online ad business monopoly as publishers and advertisers have expressed dissatisfaction with Google’s lack of transparency over the distribution of advertising funds, specifically the proportion that goes to publishers and the remainder to Google.
The business completed a number of acquisitions, such as DoubleClick in 2008 and AdMob in 2009, to help it become a major force in internet advertising.
Google continues to dominate the market by a wide margin, but, according to Insider Intelligence, its share of US digital ad revenue has been declining, dropping to 28.8% in 2017 from 36.7 in 2016.
In the Virginia-based lawsuit, the Justice Department requested that a jury decide the case.
The government claims that Google has the “tech tools to quash the threat” despite the lawsuit detailing numerous of its attempts to dominate the advertising market.
The complaint talked about header bidding, which was a way for businesses to compete for website ad space without going through Google.
