Eight states have joined with the Justice Department to file an antitrust suit against Google for its alleged online advertising monopoly.
The suit says Google has been a burden to advertisers, consumers, and the U.S. government, according to WFAA.
The U.S. government alleges that Google aimed to “neutralize or eliminate” competition in the online advertising space through its acquisition strategy and by making it difficult for advertisers to use competitors’ products, forcing them to use Google’s tools instead.
“Monopolies threaten the free and fair markets upon which our economy is based. They stifle innovation, they hurt producers and workers, and they increase costs for consumers,” Attorney General Merrick Garland said in a statement on Tuesday.
Garland said that Google has “pursued a course of anticompetitive conduct” for more than a decade that has tempered the growth of competitors, manipulated the market to protect its own interests, and coerced advertisers and publishers to employ its products.
Google has allegedly been monopolizing the online ad market since it purchased the digital marketing platform DoubleClick in 2008, according to TechCrunch.
This “vaulted Google into a commanding position over the tools publishers use to sell advertising opportunities, complementing Google’s existing tool for advertisers, Google Ads, and set the stage for Google’s later exclusionary conduct across the ad tech industry,” the lawsuit read.
Garland said that Google “engaged in exclusionary conduct” that was detrimental to online ad competition.
The lawsuit accuses Google of monopolizing how ads are delivered online by excluding competitors.
Garland said that Google controls the technology most website publishers use to offer advertising space for sale and the biggest ad exchange, which pairs publishers who have open ad space with potential advertisers. Garland claimed this meant “website creators earn less, and advertisers pay more.”
The lawsuit calls for Google to unload its digital display advertising business. Digital ads make up roughly 80% of Google’s revenues, according to WFAA.
Google’s parent company, Alphabet Inc., said that the lawsuit “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.”
Dina Srinivasan, an ad-tech expert, said the current online ad market “is broken and totally inefficient.” She noted that the percentages that intermediaries are earning — 30% to 50% — on each ad sale is “an insane inefficiency to have baked into the U.S. economy.” She added that it is “a massive tax on the free internet and consumers at large. It directly affects the viability of a free press.”
The highly complex and continuously evolving ad tech market has made it challenging for legislators to keep up.
As of 2022, Google held roughly 29% of the U.S. digital advertising market, according to Insider Intelligence Inc. Facebook was second in market share in digital advertising, and Amazon was third at 11%.
Insider Intelligence predicted that Google and Meta’s share in advertising will fall while Amazon and TikTok will gain market share.
