The Justice Department will file another antitrust lawsuit against Google as early as next month for illegally dominating the digital advertising market
- Investigators have been investigating Google’s monopoly on Internet access and dominance of online advertising for years
- Now the Justice Department is poised to sue the California-based company, Bloomberg reported on Tuesday, with a case likely to be filed in September
- Prosecutors have yet to decide whether to file the case in Washington DC or in NYC, where attorneys general have their own antitrust case
- Google has already been sued for allegedly dominating the online search market: the case, filed in December 2020, will have its final hearing this month
- Google spokesman Peter Schottenfels defended “the tremendous competition” for digital advertising and said Google supports small businesses
Federal prosecutors are reportedly in the final stages of preparing antitrust proceedings against Google and intend to file their case in September.
The Justice Department has been investigating the tech giant for several years.
In 2020, Google was sued both at the federal level and by a coalition of attorneys general for monopolizing the digital search market.
Google denied the allegations and asked the judge to drop the case: A hearing is scheduled for later this month.
On Tuesday, Bloomberg reported that another lawsuit could be filed against Google next month – this time alleging it is monopolizing digital advertising.
Three sources told Bloomberg that investigators from the Justice Department’s Antitrust Division are currently interviewing online publishers to finalize the details of the complaint.
The interviews are continuations of previous discussions, the sources said.
Google’s headquarters is pictured in Mountain View, California. The company could face another antitrust lawsuit
Sundar Pichai, the CEO of Google, whose company relies heavily on advertising for revenue
They said it’s unclear whether the case will be filed in Washington DC or in New York City, where other lawsuits against Google are pending.
Google’s spokesman said it was wrong to say the company had a monopoly, pointing to “tremendous competition in online advertising.”
Peter Schottenfels also said that Google supports small businesses.
“Our advertising technologies help websites and apps fund their content and enable small businesses to reach consumers around the world,” said Schottenfels.
‘Intense competition in online advertising has made online advertising more relevant, lowering ad technology fees and expanding options for publishers and advertisers.’
Merrick Garland, the Attorney General, is pictured August 2. The DoJ has been investigating Google for several years
Google’s ads are vital to the bottom line of the business.
On July 26, Google’s latest financial report showed that search ads pushed parent company Alphabet Inc. close to Wall Street’s revenue expectations, pushing shares better on relief that the world’s largest seller of online advertising is weathering a global recession could than smaller competitors, soared.
A trio of Alphabet executives spoke cautiously to a call with investment analysts, using “uncertain” or “uncertainty” at least 13 times to describe the economy. YouTube ad sales grew at the slowest rate since disclosures began in 2018.
But investors were focused on something else, specifically the fact that second-quarter sales from the company’s biggest revenue generator — Google search — actually beat expectations.
Alphabet’s shares rose 5.5% after the results in after-hours trading.
“Despite the disappointing quarter, expectations were so low that investors breathed a sigh of relief,” said Jesse Cohen, senior analyst at Investing.com.
In contrast, Snap Inc. shares fell more than 25% last week after the company missed revenue expectations and warned of a slowdown in the advertising market.
Alphabet executives said Google wasn’t immune to the pullback, which was caused by customers facing product shortages, lower demand and a host of other factors.
Rising wages, along with rising prices for fuel and other items, have also forced some ad buyers to scale back marketing this year.
But Google has weathered storms better than social media companies. It brings revenue through a greater variety of features in the ad market, and search ads can be generated more cheaply for clients because they often contain only text.
Customers sometimes prioritize search ads, as marketing is usually aimed at people who are actively searching for related items, which yields better returns.