Major Development: The Department of Justice Announces Major Lawsuit Against Google For Monopolizing Ad Technology
According to a report by the New York Times, eight states, along with the Department of Justice, brought up a case against Google earlier this week. The petitioners claimed that the tech giant Google has an unfair advantage over its domination of online advertisements.
As per the lawsuit, Google “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.”
Since 2020, 4 lawsuits have been brought up against Google; the current case, filed on Tuesday, was the 5th one. However, this is the first antitrust case against Google since the Biden administration took over.
The case brought up by the Department of Justice was supported by Tennessee, Virginia, Rhode Island, Colorado, New York, Connecticut, and New Jersey.
This lawsuit is aimed at Google to sell its shares from its advertising side of the business, which made nearly $54 Billion in the second-last quarter of the fiscal year 2020. This lawsuit will also be responsible for preventing Google from getting involved in “anti-competitive practices.”
The Department of Justice claimed that the tech giant executes various forms of online advertisement market and “set[s] the rules of the game to exclude rivals.”
“By becoming the dominant player on both sides of the digital advertising industry, Google could also play both sides against the middle,” the petition elaborated. “It could control both the publishers with digital ad space to sell, as well as the advertisers who want to buy that space. With influence over advertising transactions end-to-end, Google realized it could become ‘the be-all, and end-all location for all ad serving.'”
The lawsuit also highlighted the main issue of Google’s unfair dominance on online advertisement is that “website creators earn less, and advertisers pay more, than they would in a market where unfettered competitive pressure could discipline prices and lead to more innovative ad tech tools that would ultimately result in higher quality and lower cost transactions for market participants.”
The Department of Justice also revealed that an executive working at Google challenged the company’s monopoly over the digital advertising industry.
As per the lawsuit, Google officials voiced, “Is there a deeper issue with us owning the platform, the exchange, and a huge network? The analogy would be if Goldman or Citibank owned the NYSE”.
This Tuesday, Google published a blog concerning the objections put on by the Department of Justice.
“Today’s lawsuit from the Department of Justice attempts to pick winners and losers in the highly competitive advertising technology sector,” wrote Vice President of Global Ads Dan Taylor.
“It largely duplicates an unfounded lawsuit by the Texas Attorney General, much of which was recently dismissed by a federal court,” Taylor continued. “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.”
Google has been under much scrutiny for the past few years because of the tech giant’s dominance in the digital marketing industry. Undoubtedly, Google has an unfair advantage in this field, and its uncompetitive measures are forcing its rivals out of business.