The US Department of Justice on Tuesday filed a lawsuit against internet search giant Google for “monopoly” in the online advertising market, according to a court document.
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“Google has used anti-competitive and unlawful methods to eliminate or drastically reduce any threat to its dominance over the technologies used for digital advertising,” the agency claims.
The Department and eight US states, including California and New York, are asking the courts to order the Californian company for violating competition laws, seeking damages and ordering it to stop its activities related to the sale of online advertising space.
The complaint explains that Google controls both the technologies used by “virtually all websites” to sell banners or pop-up windows to brands and the tools advertisers use to buy those spaces, as well as the market in which the transactions take place.
“The damages are clear: website publishers earn less, advertisers spend more,” claim the plaintiffs.
“Although Google has faced increasing competition in recent years, its market share remains unmatched,” notes Evelyn Mitchell, analyst at Insider Intelligence.
According to her, the group collects more than a quarter of all digital ad spend and more than half of ad revenue from online searches.
The ministry is “trying to identify winners and losers” in the “already highly competitive” digital advertising industry, a Google spokesman responded.
The company believes that if the department catches on, its approach would “slow down innovation, increase advertising costs and make it harder for thousands of small businesses and publishers to grow.”
“Competition for advertising revenue is fierce online and offline,” the CCIA (Computer & Communications Industry Association) said in a statement.
This professional body, which represents the industry, believes that the ministry should consider the entire advertising market, not just the digital part.
“The government’s position that online pubs do not compete with print, radio, television and street signs defies common sense,” the CCIA said.
But for the ministry and the eight federal states, the Internet is actually at stake.
“An open Internet” is “essential to American life,” the complaint said.
The plaintiffs argue that digital advertising is necessary to fund websites and that they are “bought and sold in huge quantities in a split second,” unlike print or broadcast newspapers.
“More than 13 billion ads are sold every day” on the Internet in the United States, the complainants add.
They allege that Google abused its market dominance to shut out its competitors, specifically by “systematically taking control of a variety of high-tech tools used by publishers, advertisers and other market participants.”
“We accuse Google of using publishers’ revenues for its own profits and penalizing those who have been looking for alternatives,” Deputy Minister Vanita Gupta said in a statement.
“These methods have weakened the free and open Internet and increased costs for businesses and the United States government, including the military,” she said.
This is the department’s second complaint against the California group since President Joe Biden took office two years ago. The first, relating to its search engine dominance, is expected to lead to a court hearing later this year.
Google has been fined for violating competition law in the past, most notably by the European Union.
In the USA, the company is already facing lawsuits from a coalition of states led by Texas at the end of 2020.
According to your allegations, Google tried to oust the competition by manipulating ad auctions.
“Google should be concerned,” says Evelyn Mitchell. The company “could be forced to sell some of its advertising business.”
Joe Biden called on recently elected Republicans and Democrats to finally agree on legislation to better regulate the practices of tech giants.