The United States Department of Justice (DOJ) and eight states have filed a lawsuit against Google, alleging that the company has too much control over the online advertising market.
The complaint claims that Google’s anti-competitive actions have weakened competition in the ad tech industry, and that its control of the technology used by nearly all major website publishers to offer ad space for sale, the leading tool used by advertisers to buy ad space, and the largest ad exchange that matches publishers and advertisers, has resulted in reduced revenues for website creators and increased costs for advertisers.
According to US Attorney General Merrick Garland, Google’s conduct in key areas has led to a situation where “website creators earn less and advertisers pay more.” This has also meant that fewer publishers are able to offer content without subscriptions, paywalls, or other forms of monetization.
Assistant Attorney General Jonathan Kanter alleged that the firm’s actions over 15 years had the effect of “driving out rivals, diminishing competition, inflating advertising costs, reducing website publisher revenues, stymieing innovation and flattening our public marketplace of ideas”.
In response to the lawsuit, Google has stated that the legal action “attempts to pick winners and losers in the highly competitive advertising technology sector.” The company also claims that the lawsuit largely duplicates an unfounded lawsuit by the Texas Attorney General, much of which was recently dismissed by a federal court.
Google further said that the DOJ’s action would “reverse years of innovation, harming the broader advertising sector.” The almost 150-page complaint accuses Google of breaches of US antitrust law and aims to “halt Google’s anti-competitive scheme, unwind Google’s monopolistic grip on the market, and restore competition to digital advertising.”
The case could lead to the break-up of the firm’s advertising business if the courts side with the US government. The Justice Department complaint asks the court to compel Google to divest parts of its ad business. The US states of Connecticut, California, Colorado, New Jersey, New York, Rhode Island, Tennessee and Virginia are also joining the legal action. This latest case follows a 2020 action launched during the Trump presidency against the tech giant over its dominance in search.