Google Accused of Ad Technology Monopoly Abuse in the U.S.

Everything You Need to Know in Less Than 50 Words

The Justice Department’s antitrust lawsuit, which was joined by a group of states, alleged abuse of power in the online advertising world. This marks the fifth such lawsuit against Google by U.S. officials since 2020.

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On Tuesday, the US Justice Department and eight states sued Google, alleging that it illegally abused its monopoly over the technology that powers online advertising. This is the first antitrust lawsuit against a tech giant under President Biden and represents an escalation in legal pressure on one of the world’s biggest internet companies. The lawsuit claims that 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.”

The lawsuit is seeking to force Google to sell much of its suite of ad technology products, which includes software for buying and selling ads, a marketplace to complete transactions, and a service for showcasing ads across the internet. The lawsuit also seeks to stop the company from engaging in allegedly anticompetitive practices.

This is the fifth antitrust lawsuit filed by US officials against Google since 2020. Lawmakers and regulators around the world are trying to rein in the power that big tech companies exert over information and commerce online. In Europe, Amazon, Google, Apple, and others have faced antitrust investigations and charges, while regulators have passed new laws to limit social media’s harms and some practices such as data collection.

Google has faced particular scrutiny in the United States. In 2020, a group of states led by Texas filed an antitrust lawsuit against it involving advertising technology, while the Justice Department and another group of states separately sued Google over claims that it abused its dominance over online search. In 2021, some states also sued over the company’s app store practices.

According to William Kovacic, a former chairman of the Federal Trade Commission, the new lawsuit “adds another important complication to Google’s efforts to deal with regulators worldwide. There’s a chance one or more of these challenges is going to make its way through and hit the target.”

A Google spokesman, Peter Schottenfels, said that the lawsuit “attempts to pick winners and losers in the highly competitive advertising technology sector.” He added that it echoes the “unfounded” lawsuit led by Texas in 2020 and that the Justice Department’s latest suit makes a flawed argument that would slow innovation and harm publishers.

What Happens Now?

The Biden administration is trying to use uncommon legal theories to limit the power of some of America’s largest businesses. The Federal Trade Commission recently asked a judge to block Meta from buying a virtual-reality start-up, a rare case that argues a deal could harm potential competition in a nascent market. The agency has also challenged Microsoft’s $69 billion purchase of the video game publisher Activision Blizzard, a notable action because the two companies are not primarily seen as direct competitors.

The lawsuit on Tuesday describes a campaign by Google to monopolize advertising technology and then abuse that dominance, to the detriment of publishers, advertisers, and ultimately consumers. The Justice Department and the states, which include New York and California, said that Google had built its monopoly by buying up crucial tools that delivered ads to publishers. As a result, advertisers paid more for space on the internet, and publishers made less money as Google took its cut.

The Justice Department described internal Google documents and other evidence that it believes could help prove its case. In the lawsuit, the agency said that one Google advertising executive had questioned the company’s market power, asking if there was “a deeper issue with us owning the platform, the exchange, and a huge network” and adding that “the analogy would be if Goldman or Citibank owned the” New York Stock Exchange.

Takeaways

The Justice Department and a group of eight states filed an antitrust lawsuit against Google, accusing the company of illegally monopolizing the technology that powers online advertising. The lawsuit seeks to force Google to sell much of its ad technology products and stop engaging in allegedly anticompetitive practices. This is the fifth antitrust lawsuit filed against Google by U.S. officials since 2020.

Source: NY Times