US Justice Department, 8 States File Antitrust Suit Against Google Over Alleged Advertising Monopoly

The US Justice Department and eight states lodged an antitrust lawsuit against Google, alleging that the company holds a monopoly over the entire online advertising ecosystem and is harming advertisers, users, and even the federal government of the country.

According to a report by AP, the lawsuit claims that Google is attempting to acquire competitors in the internet advertising business in order to "neutralize or eliminate" them by forcing advertisers to use its products.

Anti-Competitive Behavior

Attorney General Merrick Garland claimed that for 15 years, Google has engaged in anti-competitive behavior that has slowed the development of competing technology and tampered with the workings of online ad auctions to compel advertisers and publishers to adopt its products.

He also alleged that Google participated in exclusionary conduct that significantly compromised competition in the ad tech sector.

The lawsuit, which is the most recent legal action the government has taken against Google, accuses the business of illegally monopolizing the way internet advertisements are provided by eliminating rivals.

The tech giant offers an ad manager that enables publishers with direct sales to manage their own advertisements. Google's ad exchange, on the other hand, serves as a real-time marketplace for online display advertisements.

According to Garland, Google owns the technology that most significant website publishers use to sell advertising space as well as the biggest ad exchange that connects publishers and advertisers when ad space is purchased. He adds that while advertisers pay more, website creators make less money.

The lawsuit was filed in federal court in Alexandria, Virginia. It requests that Google give up its buying, selling, and auctioning of digital display advertising businesses and concentrate solely on its search business, as well as other services like YouTube, cloud computing, and Gmail.

"Flawed Argument"

Google's parent company Alphabet Inc. argues in a statement that the move "doubles down on a flawed argument that would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow."

Currently, over 80% of Google's revenue comes from digital advertising, according to AP. However, the firm's market share has decreased recently, along with that of Facebook's parent company, Meta, as smaller competitors have taken more of the internet advertising sector.

The lawsuit filed on Tuesday comes as the US government steps up its efforts to keep checks and balances in the tech sector.

In 2021, the European Union began an antitrust inquiry investigating Google's alleged hegemony in digital advertising. Regulators in Britain and Europe are also investigating whether Google and Meta's partnership for online display advertising services violated fair competition laws.