On Tuesday, the US Department of Justice filed its second antitrust lawsuit The Google In just over two years. It’s the latest sign that the US government isn’t backing down from cases against tech companies even in light of Mixed record on court on antitrust lawsuits.
Google shares fell 1.3% Tuesday afternoon.
This lawsuit you focus on The Google The online business and it seeks to have Google divest parts of the business, the first against the company filed under the Biden administration. Section Previous lawsuitIn October 2020 under the Trump administration, Google was accused of using its alleged monopoly power to cut off competition for Internet search through exclusion agreements. this case He is expected to go to trial in September.
Google’s advertising business generated $54.5 billion in the quarter ended September 30th from search, YouTube, Google Network ads, and other advertising.
Google also faces three more antitrust lawsuits from large groups of state attorneys general, including one She focused her advertising activity under the leadership of Texas Attorney General Ken Paxton.
California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia have joined the DOJ in the latest lawsuit.
Google’s advertising business has drawn critics because the platform operates on multiple aspects of the market — buying, selling, ad exchange — giving it a unique view of the process and potential leverage. The company has long denied that it controls the online advertising market, citing market share from competitors including Meta Facebook.
In their lawsuit, the Department of Justice and the States argues that Google sought to control all aspects of the market, recognizing that it “could become the perfect and definitive site for all advertising services.”
“Google will no longer have to compete on merit; it can simply set the rules of the game to exclude competitors,” they claimed.
According to the complaint, even one Google advertising executive has questioned the wisdom of Google’s extensive ownership in the space.
“[I]Is there a deeper problem with our ownership of the platform, the exchange, and a huge network? the executive allegedly asked. The analogy would be if Goldman or Citibank owned the New York Stock Exchange. “
They claim that the harm from Google’s practices is that “website builders earn less and advertisers pay more than they pay in a market where unrestrained competitive pressure can set prices and lead to more creative ad technology tools that ultimately lead to higher quality and lower-cost transactions for participants.” In the market “.
As a result, they added, more publishers are being forced to turn to alternative models such as subscriptions to fund their operations.
They also claim that Google acquired other companies, including its 2008 acquisition of publisher DoubleClick’s ad server and an “emerging ad exchange” that became Google’s AdX, to grow its market power and “pave the way for Google’s subsequent extraordinary behavior across the advertising technology industry”.
“In reality, Google was stealing from Peter (advertisers) to pay Paul (publishers), while collecting huge transaction fees for its premium positioning in the middle, the enforcers claim.” Instead of helping to fund website publishing, Google was withdrawing It makes advertising money for itself by charging hyper-competitive fees on its platforms. And a competing publisher’s ad server can’t compete with Google’s inflated ad rates, especially without access to Google’s captive advertiser order from Google Ads.”
The progressive head of the Justice Department’s antitrust division, Jonathan Kanter, was recently authorized to work on matters related to Google, The Wall Street Journal reported earlier this month. bloomberg I previously reported that Kanter was not allowed to work on cases involving the company while management evaluated Google’s request to review its denial reasons. Prior to taking office in government, Kanter represented some of Google’s opponents and critics, including howling And News Corp.
A Google spokesperson said in a statement last year that Kanter’s past actions and statements “raise serious concerns about his ability to take sides.”
Google isn’t the only tech giant that has seen scrutiny from the federal government. at the Federal Trade Commission, meta He is also the subject of two antitrust cases, as is Microsoft The proposed acquisition of Activision.
Google and other technology companies have also faced increasing scrutiny from abroad, particularly in Europe, where Google has also grappled with several competition issues and new regulations Threatening major changes in technology business models.
Google did not immediately provide comment on the lawsuit. The company reports its earnings on February 2nd.
This story is evolving. Check back for updates.