The Justice Department filed an antitrust lawsuit against Google on Tuesday that accuses the tech giant of thwarting competition in the digital advertising industry.
Eight states joined the U.S. to accuse the California-based company of abusing “monopoly power” to disadvantage advertisers who use other ad tech products, and the lawsuit seeks damages and the divestiture of certain ad tech products of the tech giant.
The complaint, filed in the U.S. District Court for the Eastern District of Virginia, says Google’s strategy includes neutralizing or eliminating competitors through acquisitions, along with wielding its power in digital advertising markets to make advertisers use its products.
“By deploying opaque rules that benefit itself and harm rivals, Google has wielded its power across the ad tech industry to dictate how digital advertising is sold, and the very terms on which its rivals can compete,” the complaint states.
The lawsuit is the latest confrontation between the Justice Department and Google. In 2020, under the Trump administration, the department accused the company of anticompetitive business practices on search and search advertising. The Google search litigation is scheduled for trial in September, the DOJ said.
Antitrust accusations
Attorney General Merrick B. Garland said at a news conference Tuesday that Google engaged in anticompetitive behavior for 15 years, allowing it to force advertisers to use its tools and stop the ascent of rival technologies.
“No matter the industry and no matter the company, the Justice Department will vigorously enforce our antitrust laws,” Garland said at a news conference announcing the lawsuit.
Associate Attorney General Vanita Gupta said that anticompetitive conduct threatens innovation, weakens workers’ rights and stifles free expression. The DOJ said this is the first monopolization case in approximately half a century in which it has sought damages for a civil antitrust violation.
“Today’s landmark action against Google underscores that it is a priority of this Justice Department to fight the abuse of market power,” Gupta said.
As a result of Google’s posture, website creators make less money while advertisers pay more than they would in an environment where competition could discipline prices, according to Tuesday’s lawsuit.
“This conduct hurts all of us because, as publishers make less money from advertisements, fewer publishers are able to offer internet content without subscriptions, paywalls, or alternative forms of monetization,” according to the lawsuit.
Internal Google documents show that the company would earn significantly less in a market that was competitive, according to the lawsuit.
“On average, Google keeps at least thirty cents — and sometimes far more — of each advertising dollar flowing from advertisers to website publishers through Google’s ad tech tools,” the lawsuit states.
Hill reaction
Sen. Amy Klobuchar, D-Minn., the incoming chair of the Senate Judiciary Committee’s antitrust panel, told reporters that she was glad the Justice Department had stepped in to stop Google’s practices.
“The tech monopoly has gotten away with complete market dominance — in the case of Google, 90 percent of the ad market in this case — for too long,” Klobuchar said. “We just gave the Justice Department additional resources, and we are glad they will be using them.”
In the omnibus appropriations law passed last year, DOJ’s Antitrust Division received a $32 million increase from the prior fiscal year, up to $225 million. Similarly, the Federal Trade Commission received a $48 million increase, both funded by the first increase to merger filing fees in two decades.
Sen. Josh Hawley, R-Mo., a member of the Judiciary Committee, praised the lawsuit Tuesday but added that there are still problems with antitrust enforcement that Congress has not addressed.
“Google does, I think, have a pretty clear monopoly of the ad stack, and it is a huge problem,” Hawley said. “I thought this last Congress would be an opportunity to pass meaningful antitrust reform, but we got nothing.”
The lawsuit landed on the same day Senate Judiciary held a hearing on antitrust concerns with concert tickets, prompted by problems with Taylor Swift show sales.
Several advocacy groups, including the Tech Oversight Project, praised the lawsuit. In a statement Tuesday, the Tech Oversight Project’s deputy executive director, Kyle Morse, said the suit would hold Google accountable for “years of abuse in the online marketplace.”
“Gone are the days of quack laissez-faire economic policies that allow a handful of tech giants to gobble up and manipulate markets,” Morse said.
Others were more critical, such as Netchoice’s vice president and general counsel, Carl Szabo. In a statement Tuesday, Szabo said the DOJ’s suit “lacks the facts and the law.” Netchoice is a trade group that represents Google and other tech companies.
“Google’s market share of advertising has actually been decreasing. When it comes to digital ads, prices are at historic lows, and quality has never been higher. This is clear evidence of a highly competitive marketplace,” Szabo’s statement said.
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