Google is facing a new antitrust lawsuit from the US Department of Justice that alleges the Silicon Valley company has raised costs for internet users by aiming to monopolise the digital advertising technology industry.
鈥淭his case is super important because advertising is the currency of the internet, and will determine the digital economy鈥檚 future trajectories,鈥� says at New York University.
The alleges that Google has engaged in 鈥渁nticompetitive conduct鈥� by controlling the technology used by major website publishers to sell advertising space, controlling the leading tool used by advertisers to buy ad space and controlling the largest ad exchange that matches publishers and advertisers together each time ad space is sold.
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鈥淕oogle鈥檚 own documents estimate that it keeps, on average, at least 30 cents of each advertising dollar that flows through Google鈥檚 ad tech tools,鈥� said US Assistant Attorney General Jonathan Kanter in a January 24 press conference. 鈥淔or certain customers, Google keeps significantly more.鈥�
The lawsuit describes Google鈥檚 revenue share fees as impacting other companies鈥� advertising budgets and website publishers鈥� revenues, which in turn means fewer publishers can offer free content to internet users without relying on subscriptions or other forms of revenue. The lawsuit also claims that the US government 鈥� which has bought more than $100 million in online display advertising 鈥� is among the advertisers that have 鈥渋ncurred monetary damages as a result of Google鈥檚 anticompetitive conduct鈥�.
鈥淚 am quite convinced that this lawsuit is really well designed but less convinced that it will displace Google鈥檚 dominance in the ad tech space in the near future,鈥� says Bietti. If the lawsuit succeeds, it could enable 鈥渕ore contestability and transparency around how Google charges advertisers and pays publishers in this space鈥�, she says.
The Department of Justice is looking for Google to pay financial damages to the federal government and for Google to divest itself of its advertising platform Google Ad Manager.
Google responded to the announcement in a that claims the lawsuit 鈥渁ttempts to pick winners and losers in the highly competitive advertising technology sector鈥�. The company had not responded to New 杏吧原创鈥檚 request for comment by the time of publication.
This action follows a previous Department of Justice lawsuit filed in October 2020 that focuses on Google鈥檚 alleged monopoly over internet search. That case is scheduled to go to trial in September.
The US Department of Justice is not the only government entity targeting Google鈥檚 ad tech business. The European Commission also opened an antitrust investigation in 2021 looking into whether Google鈥檚 actions around online ad tech services have violated European Union competition rules.
鈥淚t will be interesting to observe if there is any coordination between the EU and US as the case moves forward,鈥� says at Tilburg Law School in the Netherlands.
