On Tuesday, the United States Department of Justice (DOJ) and eight states filed a lawsuit against Google, accusing the company of harming competition in the online advertising market and calling for it to be broken up. This marks the first major antitrust case against a Big Tech company under the Biden administration.
The eight states joining the suit include California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia. This lawsuit significantly escalates the risks to Google emanating from Washington, where lawmakers and regulators have frequently raised concerns about the tech giant’s power but have so far failed to pass new legislation or regulations that might rein in the company or its peers.
For years, Google’s critics have claimed that the company’s extensive role in the digital ecosystem that enables advertisers to place ads, and for publishers to offer up digital ad space, represents a conflict of interest that Google has exploited anticompetitively.
The DOJ alleged that Google actively and illegally maintained its dominance by engaging in a campaign to thwart competition. According to the complaint, Google gobbled up rivals through anticompetitive mergers, and bullied publishers and advertisers into using the company’s proprietary ad technology products.
As a result of this alleged anticompetitive behavior, the DOJ claims that lower ad revenues for websites and publishers and higher advertising costs for marketers have occurred. Even the US government was harmed, according to the complaint, which named the US Army as one of multiple government advertisers using Google’s tools. Since 2019, the US government has spent $100 million buying online ads, the complaint said.
As part of the lawsuit, the US government called for Google to be broken up and for the court to order the company to spin off at least its online advertising exchange and its ad server for publishers, if not more. The suit was filed in the US District Court for the Eastern District of Virginia.
This is the federal government’s second antitrust complaint against Google since 2020, when the Trump administration filed a suit against Google’s alleged anticompetitive harms in search and search advertising.
That case is still ongoing. Google has also been the target of antitrust litigation by state and private actors. In response, Google stated that the DOJ suit “attempts to pick winners and losers in the highly competitive advertising technology sector” and that it would “slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow”.
The latest lawsuit is a significant escalation of the ongoing legal battles between the US government and Google. It comes after years of accusations that Google has exploited its dominant market position in the online advertising industry to stifle competition. The DOJ and the participating states claim that Google’s acquisition of rivals, as well as its use of exclusive contracts and other anti-competitive practices, has harmed competition and led to higher advertising costs for both businesses and consumers.
Additionally, the complaint alleges that Google’s dominance in the online advertising market has also led to lower ad revenues for websites and publishers, and that the company has used its power to bully publishers and advertisers into using its proprietary ad technology products.
The US government is calling for Google to be broken up and for the court to order the company to spin off at least its online advertising exchange and its ad server for publishers. This would mark a major shift in the way Google operates and could have significant implications for the company’s future.
Google, for its part, has denied any wrongdoing and has stated that the DOJ’s lawsuit is an attempt to “pick winners and losers” in the highly competitive advertising technology sector. The company also pointed out that a federal judge last year knocked down a claim that Google colluded with Facebook in a separate antitrust suit led by the state of Texas. However, that judge also ruled that a number of monopolization claims in the Texas case could move forward.
This lawsuit is likely to be a long and complex legal battle, with significant ramifications for both the tech industry and consumers. As the case unfolds, it will be important to closely monitor the arguments and evidence presented by both sides in order to understand the implications of this lawsuit for the future of the tech industry.
