The US Department of Justice attacked the company owned by Alphabet Google with a lawsuit alleging a monopoly on digital advertising technologies.
DOJ, with Attorneys General of California, Colorado, Connecticut, New Jersey, New York, Rhode IslandTennessee and Virginia, filed a civil antitrust lawsuit against Google in the US District Court for the Eastern District of Virginia, according to the DOJ release on Tuesday (January 24).
Google is being accused of undermining competition in internet advertising technology through mass acquisitions and anti-competitive auction manipulation.
The DOJ states: “For the past 15 years, Google has engaged in a process of exclusion and anticompetitive behavior that has included disabling or eliminating ad technology competitors through acquisition.
Google is leveraging its dominance in the digital advertising markets to force more publishers and advertisers to use its products and prevent them from using competing products.
In the third quarter of 2022, Google’s ad revenue grew to $54.48 billion from $53.13 billion in 2021 despite slowing global ad spending. However, its branch YouTube, to post ad revenue fell 1.9 percent year-on-year to $7.07 billion, which Philipp Schindler, Alphabet’s SVP and chief business officer, attributed to “a shift in user behavior.”
The DOJ states that Google now controls the digital engine that nearly every major website publisher uses to sell ads on their sites, and controls the dominant advertising engine that large advertisers and advertisers use. Small used to buy inventory. It also controls the largest ad exchange, a technology that runs real-time auctions to match buyers and sellers of online ads.
“Today’s complaint alleges that Google has used anticompetitive, exclusionary, and unlawful conduct to eliminate or substantially mitigate any threat to Google’s dominance of companies. digital advertising technology,” said Attorney General Merrick Garland.
“Regardless of industry and company, the Department of Justice will vigorously enforce our antitrust laws to protect consumers, protect competition, and ensure economic fairness and opportunity for all. everyone.”
The lawsuit alleges that on average, Google pocketed more than 30% of the advertising revenue that flows through its digital ad technology products.
Among the allegations against Google include acquiring competitors to gain control of key digital advertising tools.
In 2007, Google bought internet advertising company DoubleClick for $3.1 billion, turning it into an “advertising powerhouse,” according to New York Times.
The deal was approved in a 4-to-1 vote by the Federal Trade Commission.
But in 2020, DOJ submit antitrust charges against Google for “unlawfully maintaining a monopoly through anticompetitive and exclusionary practices in the search advertising and search markets”.
“Google is the exclusive gatekeeper on the internet for billions of users and countless advertisers worldwide,” the DOJ said at the time.
That case is scheduled to be heard in September 2023.
The latest lawsuit, which also targets Google’s advertising dominance, focuses on digital advertising technologies, collectively known as the “ad technology stack,” to which website publishers subsist. depend on to sell advertising. Advertisers also rely on the ad technology stack to buy ads and reach potential customers.
Deputy Attorney General Lisa Monaco said: “The complaint filed today alleges a widespread and systematic pattern of misconduct through which Google seeks to strengthen market power and prevent competition. on the free market.
“In pursuit of excessive profits, Google has caused great damage to online publishers and advertisers as well as American consumers. This lawsuit marks an important milestone in the ministry’s efforts to hold major technology companies accountable for violations of antitrust laws,” Monaco said.
Google is also accused of applying its tools by blocking website publishers from using its newly acquired tools, distorting auction competition by restricting real-time bidding on space. publisher advertising to ad exchanges and manipulate the auction mechanism on some of its products to protect Google from competition and deprive competitors of size.
Deputy Attorney General Vanita Gupta said: “The Department’s landmark action against Google underscores our commitment to combating abuses of market power. We allege that Google misappropriated publishers’ revenue for its own profit and punished publishers who sought alternatives. Those actions have undermined the free and open internet, and increased advertising costs for US businesses and governments, including our military.”
Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division, added: “Today’s lawsuit is intended to hold Google accountable for its long-standing monopoly in digital advertising technologies. that content creators use to sell ads and advertisers use to buy ads on the open internet.”
“Our complaint lays out detailed allegations that explain how Google has engaged in behavior consistently for 15 years that has — and continues to be — affecting the exclusion of competitors, diminishing competition, inflating inflate advertising costs, reduce revenue for news publishers and content creators, stifle innovation, and harm the exchange of information and ideas in the public domain.”
The latest legal action comes as Google’s parent company Alphabet becomes one of the latest US-based tech giants to take action. job cuts in the context of the global economic downturn.
Reuters reportcites an employee memo sent by Alphabet CEO Sundar Pichai on Friday (January 20), that Alphabet is cutting 12,000 positions, or about 6% of its workforce across Global.
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