The US Department of Justice (DOJ) and eight US states are suing Google for allegedly monopolizing online advertising.
The complaint, filed Tuesday in Virginia, alleges that Google monopolizes key digital advertising technologies, collectively known as the “ad tech stack,” on which website publishers rely to sell ads and advertisers Rely on buying ads and reaching potential customers.
Owned by Alphabet Inc., Google now controls the digital tool that nearly every major website publisher uses to sell advertising on their websites (publisher ad servers). the states alleged in a news release. It controls the major advertiser tool that helps millions of large and small advertisers buy ad inventory (Advertiser Advertising Networks), and it controls the largest advertising exchange (Ad Exchange), a technology that enables buyers of online and runs real-time auctions to match sellers with advertising.
The government said in the release that website publishers use ad technology tools to generate advertising revenue that supports the creation and maintenance of a vibrant open web, giving the public unprecedented access to ideas, artistic expression, information, goods and services. provide. “Through this antitrust lawsuit, the Department of Justice and state attorneys general seek to restore competition in these important markets and obtain equitable and monetary relief on behalf of the American public.”
The lawsuit alleges that over the past 15 years, Google has engaged in anti-competitive and exclusionary conduct, including neutralizing or eliminating ad technology competitors through acquisitions, to maintain its dominance in the digital advertising markets. To keep forcing more publishers and advertisers to use their products, and to stifle the ability to use competing products. “In doing so, Google solidified its dominance in the tools that website publishers and online advertisers rely on, as well as the Digital Ad Exchange that runs ad auctions,” Sarvers said in the news release.
The governments are seeking “equal relief on behalf of the American public as well as treble damages for damages caused by federal government agencies that overpay for web display advertising.”
In response, Dan Taylor, Google’s vice president of advertising, said, complained The DOJ is “doubling down on a flawed argument that will slow innovation, raise advertising fees and make growth harder for thousands of small businesses and publishers. It’s demanding that we close two acquisitions that took place 12 years ago ( AdMeld) and 15 years ago (DoubleClick) were reviewed by US regulators.
“In trying to reverse these two acquisitions, the DOJ is attempting to rewrite history at the expense of publishers, advertisers and Internet users. Both of these acquisitions enabled us to invest heavily in the development of new and innovative advertising technologies.” These deals were reviewed by regulatorincluding the DOJ, and allowed to proceed. Since then, competition in this area has only increased.
The DOJ press release includes this graphic detailing how Google allegedly dominates the buying and selling of online ads:
States alleging Google’s anti-competitive conduct include:
- Getting Competitive: engaging in a pattern of takeovers to gain control of major digital advertising tools used by website publishers to sell advertising space;
- To force adoption of Google’s tools: locking website publishers into their newly acquired equipment, by limiting advertiser unique, mandatory demand for their ad exchange and, in turn, conditioning effective real-time access to their ad exchange on the use of their publisher ad servers;
- Distorted Auction Competition: limit real-time bidding on publisher inventory for its ad exchange, and inhibit the ability of rival ad exchanges to compete on equal terms with Google’s ad exchange; And
- Auction Manipulation: Manipulating the auction mechanism in many of its products to protect Google from competition, massively depriving rivals and preventing the rise of rival technologies.
US Attorney General Merrick Garland said, “Today’s complaint alleges that Google engaged in anticompetitive, exclusionary, and unlawful conduct intended to eliminate or severely reduce any threat to its dominance over digital advertising technologies.” have used.” “No matter what the industry and no matter the company, the Department of Justice will vigorously enforce our antitrust laws to protect consumers, protect competition, and ensure economic fairness and opportunity for all.”
This is the second US government antitrust lawsuit against Google. In 2020, DOJ filed a civil antitrust suit against Google To monopolize search and discovery advertising, which are distinct markets from digital advertising technology markets. The hearing of this case is to be held in September.
According to Politico, Google has many of the most widely used tools that advertisers use to serve ads on websites, and that publishers use to sell space. It also owns AdX, one of the most widely used exchanges, which matches advertisers and publishers in automated auctions in the milliseconds it takes to load a webpage.
The antitrust advertising suit launched today is similar to a lawsuit filed against Google by the state of Texas and other states in 2020. Parts of the Texas-led case were dismissed by a federal judge in Manhattan last year, but most of the case continues, Politico says.
The Chamber of Progress, an American group backed by the tech industry make a statement The decision of today’s action by the Department of Justice.
“The upcoming lawsuit comes as Google’s market share in the ad tech industry shrinks and the tech and advertising industries face economic adversity,” the statement said.
The CEO of the Chamber of Progress said, “Google’s online advertising market share is now at an all-time low, and it has laid off 12,000 workers amid a declining advertising market – so this DOJ case seems far removed from economic reality. ” Adam Kovacevich. “As the tech sector and advertising industry shed jobs, the Biden administration should look for ways to support these sectors, not undercut what’s left.”
