Google is facing a lengthy antitrust lawsuit from the Department of Justice over its digital advertising practices.
- The Department of Justice (DOJ) filed an antitrust complaint against Google on Tuesday against the company’s “anticompetitive, exclusionary, and unlawful” attempts to maintain dominance in advertising.
- “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,” says the DOJ.
- The suit is the latest in a long line of antitrust threats levied against Google to force the company to sell off a portion of its digital advertising business. However, any resulting litigation could take years or may not be successful at all, Axios notes.
Why It’s Important
Google has long held a place in the tech industry as one of the largest and most unbeatable monolithic companies to arise out of Silicon Valley. Parent company Alphabet owns and maintains the world’s largest search engine in addition to researching thousands of other small internet-based products and applications and selling advertising space—which accounts for 12% of Alphabet’s revenue.
The DOJ is arguing that Google’s size and market power constitutes a monopoly and is pushing for Google’s Ad Manager, a former ad company called DoubleClick that Google purchased in 2007, to be spun off into a separate entity. This would not constitute a breakup of Google, but divesting this arm of the company would be costly and cut into Alphabet’s overall revenue and profitability.
“The United States and the Plaintiff States bring this action for violations of the Sherman Act to halt Google’s anticompetitive scheme, unwind Google’s monopolistic grip on the market, and restore competition to digital advertising,” says the lawsuit.
Attorney General Merrick Garland told reporters Tuesday that the company’s conduct has severely weakened its rivals in advertising.
“First, Google controls the technology used by nearly every major website publisher to offer advertising space for sale. Second, Google controls the leading tool used by advertisers to buy that advertising space. And third, Google controls the largest ad exchange that matches publishers and advertisers together each time ad space is sold,” says Garland.
Google Vice President of Global Ads Dan Taylor accused the DOJ of attempting to pick favorites and of resurrecting a failed legal strategy that Texas Attorney General Ken Paxton previously used against the company unsuccessfully in 2020. It also claims the lawsuit could damage decades of innovation and harm small businesses.
“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,” says Taylor.