In a lawsuit against Google, the US Department of Justice (DOJ) and eight US states claim that the company has excessive control over the online advertising market.
According to US Attorney General Merrick Garland, its anti-competitive practices have “weakened, if not killed, competition in the ad tech business.”
Google charged that the DOJ was “doubling down on an argument that is incorrect.”
Google generates the majority of its billion-dollar revenue from online advertising.
Google is the industry leader, however, according to market research firm Insider Intelligence, its share of all US digital ad revenue will drop from 36.7% in 2016 to 28.8% in 2022.
Added Paywalls
Mr. Garland claimed that Google engaged in anti-competitive behavior in three crucial areas:
It oversees the technology that almost all significant internet publishers use to sell ad space.
It manages the main instrument that businesses use to purchase advertising space.
It is in charge of the biggest marketplace that connects publishers and advertisers.
According to Mr. Garland, the Google program causes “website creators to earn less and marketers to spend more.”
Less publishers may provide content without paywalls, subscriptions, or other types of monetization as a result.
The firm’s conduct over a 15-year period, according to Assistant Attorney General Jonathan Kanter, “drove away rivals, diminished competition, inflate advertising costs, reduce online publisher revenues, stifle innovation, and flatten our public marketplace of ideas.”
However, Google announced the legal action in a statement to the BBC “to make predictions about who would succeed and fail in the fiercely competitive advertising technology market.
“The Texas Attorney General’s unjustified case, which was recently partially dismissed by a federal court, is basically duplicated in this one.
“DOJ is reiterating a false argument that will stifle innovation, increase advertising costs, and make it more difficult for thousands of small businesses and publishers to expand,” the statement reads.
The DOJ’s decision, according to Dan Taylor, vice president of global advertising, would “undo years of progress, damaging the broader advertising sector,” in a blog post.
The Eight States
Aiming to “stop Google’s anti-competitive plan, unwind Google’s monopolistic grip on the industry, and restore competition to digital advertising,” the almost 150-page complaint charges Google with violating US antitrust law.
If the courts rule in favor of the US government, it might result in the firm’s advertising division being dissolved. The Justice Department’s complaint requests that the court order Google to sell off a portion of its advertising business.
Connecticut, California, Colorado, New Jersey, New York, Rhode Island, Tennessee, and Virginia are among the US states that have joined the lawsuit.
This current complaint comes after a 2020 lawsuit brought against the tech giant because of its dominance in search during the Trump administration.
It is left to be seen how Google tackles the situation, and we will keep you updated about this issue in the future too.
