January 25, 2023

U.S. Justice Department and 8 States Sue Google Over Digital Ad Business

The U.S. Justice Department and eight states are suing Google over its digital ad business, accusing the tech giant of using its dominance in the market to harm competitors and force ad buyers and sellers to use its products at unfavorable terms.[0] The Justice Department is seeking to break up the company’s advertising business and obtain unspecified damages for harm directly impacting the federal government.[1]

The 139-page lawsuit alleges that Google has used “anticompetitive, exclusionary and unlawful means” to stifle competition in the roughly $250 billion U.S. market for digital ads.[2] In particular, Google has allegedly monopolized the ad tech business, forcing companies to use its technology for their online advertising needs and taking a healthy percentage off the top—at least 30 percent, the suit says.[3]

The government seeks at a minimum to force Google to sell off its Ad Manager suite, including both Google’s publisher ad server, Doubleclick for Publishers, and Google’s ad exchange, AdX. In the lawsuit, a demand is made for Google to separate its Google Ad Manager, a sell-side advertising platform, from its other services. The Justice Department is also requesting that AdX, the Google auction platform which brands utilize to bid for publishers’ ad space, be divested.[4] The lawsuit has requested for “any additional structural relief as needed to cure any anticompetitive harm” to be implemented in order to resolve any competitive harm that may have been caused in the advertising technology market.[4]

The complaint also cites internal communication from a Google advertising executive who compared the company’s power in multiple parts of the ad-selling process this way: “The analogy would be if Goldman or Citibank owned the NYSE,” a reference to the New York Stock Exchange.[5]

Google has long denied it dominates the online advertising market, pointing to the market share of competitors including Meta.[6] But the Justice Department says Google’s market share is the largest of any single company, with a 26.5% of the $278.6 billion US digital ads market.[5] Google also faces antitrust suits from the European Union, the Federal Trade Commission, and New York State.[7]

In a statement, Google said “DOJ is doubling 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.”[8] The Justice Department’s lawsuit alleges Google’s business practices have resulted in a “broken” advertising market in which website creators earn less and advertisers pay more.[9]

0. “The Department of Justice sues Google for antitrust violations over its ads, again” Vox.com, 24 Jan. 2023, https://www.vox.com/recode/2023/1/24/23569609/google-antitrust-lawsuit-digital-ads

1. “Google accused of monopolizing $250B U.S. digital ad market” POLITICO, 24 Jan. 2023, https://www.politico.com/news/2023/01/24/new-doj-lawsuit-could-break-up-google-00079229

2. “Justice department alleges Google tried to ‘eliminate’ ad market rivals in lawsuit” The Guardian, 24 Jan. 2023, https://www.theguardian.com/technology/2023/jan/24/justice-department-lawsuit-google-antitrust-law-advertising

3. “US says Google ‘unlawfully’ dominates ad industry in lawsuit” Al Jazeera English, 24 Jan. 2023, https://www.aljazeera.com/news/2023/1/24/us-says-google-unlawfully-dominates-ad-industry-in-lawsuit

4. “Justice Department and eight states sue Google to break up its ad tech business” SiliconANGLE News, 24 Jan. 2023, https://siliconangle.com/2023/01/24/justice-department-eight-states-sue-google-break-ad-tech-business/

5. “U.S. sues Google for allegedly breaking antitrust laws with its ad business” NPR, 24 Jan. 2023, https://www.npr.org/2023/01/24/1151055903/doj-files-second-antitrust-suit-against-google-seeks-to-break-up-its-ad-business

6. “DOJ files second antitrust suit against Google, seeks to break up its ad business” CNBC, 24 Jan. 2023, https://www.cnbc.com/2023/01/24/doj-files-second-antitrust-lawsuit-against-google.html

7. “Google antitrust lawsuit: Justice Department sues” Axios, 25 Jan. 2023, https://www.axios.com/2023/01/24/justice-department-google-antitrust-lawsuit

8. “Google’s most serious antitrust challenge to date” Platformer, 25 Jan. 2023, https://www.platformer.news/p/googles-most-serious-antitrust-challenge

9. “DOJ sues Google over online advertising dominance” The Washington Post, 24 Jan. 2023, http://www.washingtonpost.com/technology/2023/01/24/doj-google-lawsuit-ads/

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