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The DOJ is suing Google again, attacking its dominance in online advertising

The US Department of Justice and eight states on Tuesday sued Google over its online advertising businessalleging that the company abused its monopoly power and harmed advertisers and publishers.

The DOJ’s complaint (which you can read in its entirety below) was filed in federal court in Virginia. It said Google had “corrupted legitimate competition in the ad technology industry” by taking control of online advertising systems and inserting itself “into all aspects of the digital advertising market.” Google allegedly did this by eliminating competition through acquisitions and using its dominance to encourage advertisers to use its products over those of others. The complaint names only Google as a defendant, not any individuals. It also calls for Google to sell part of its ad tech business.

The Justice Department also said that Google penalizes websites that “dare to use competing ad technology products” and uses its dominance in ad technology to “drive more transactions to its own ad technology products, where it extracts inflated fees to line its own pockets.” at the expense of the advertisers and publishers it purports to serve.”

The case is the latest example of government efforts to rein in Big Tech. The most financially successful companies on the planet have enormous power over our lives and over businesses around the world.

Google has denied the allegations.

“Today’s DOJ lawsuit attempts to pick winners and losers in the highly competitive ad tech sector,” Google Ads leader Dan Taylor said in a blog post. The Justice Department’s lawsuit largely duplicates a “baseless lawsuit” by Texas Attorney General Ken Paxton that was dismissed in federal court, Google said. The Justice Department’s case is flawed and “will slow innovation, increase advertising fees and make it harder for thousands of small businesses and publishers to grow,” Taylor said.

The Justice Department did not respond to a request for comment.

While there are some similarities to the Texas case, the Justice Department conducted its own multi-year investigation that found Google maintained “numerous monopolies,” Assistant Attorney General Jonathan Kanter said at a news conference Tuesday.

The Justice Department’s lawsuit is a rare case in which the department has called for the breakup of a major company. Other examples include his take on mainframe maker IBM in the 1970s, phone giant AT&T in 1982, and Windows creator Microsoft in 2000.

It comes as governments around the world look to rein in Big Tech. The US Senate has been thinking about it for the last year American Online Innovation and Choice Act to curb the influence of Amazon, Apple and Google in digital markets. Last year, Google was fined in France for tracking users and agreed to a $391.5 million settlement with attorney general over location tracking practices.

Kanter said Google’s dominance in digital ads is equivalent to banking firms like Goldman Sachs or Citibank owning the New York Stock Exchange. Google has engaged in this behavior for 15 years, inflating advertising costs, reducing website revenue, stifling innovation and “flattening our public marketplace of ideas,” he said. Kanter also alleged that Google’s behavior has harmed the US government and military.

Among the examples of alleged abuse, Kanter told Google:

  • They used binding arrangements to lock content creators into Google’s system.
  • He manipulated ad auctions by giving himself first and last view advantages over the bidding process.
  • It blocked websites from using rival technology and fined those who tried.
  • Collected and used rival bidding data.

Kanter also used information from Google documents and employees to argue for the company’s dominance:

  • A Google employee said the company’s ad exchange is an “authoritarian middleman.”
  • Senior executives said that replacing ad servers for publishers is a “nightmare” that “needs an act of God.”
  • A Google manager said: “Our goal should be all or nothing.” Use Google’s ad exchange or don’t get access to requests from our advertisers.”
  • A Google employee said the company was “overcharging” advertisers by $3 billion a year, passing the money on to publishers to force them to comply with Google’s ad technology.
  • Google’s CEO detailed the steps to “dry out” the rival.

The Computer and Communications Industry Association, a technology lobby group, sided with Google despite some earlier support for “appropriate” government intervention: “We find this lawsuit and the radical structural remedies it proposes unjustified.” “Digital services are competing fiercely for advertising dollars on screens of all sizes, and the complaint appears to ignore these dynamics as well as macro trends in the global advertising market,” the group said in a statement.

This is the second antitrust lawsuit the Justice Department has filed against Google, but the first since the Biden administration. An Case from October 2020 filed during the Trump administration, alleging that Google blocked competitors by making deals with Apple and Samsung to be the default search engine on their devices.

Google is also facing antitrust lawsuit brought by Texas, along with 16 states and territories, alleging that the search giant worked with Facebook to give the social network an advantage in online advertising auctions. The Justice Department, under the Clayton Antitrust Act, also has the right to sue if the federal government believes it has been harmed.

Last year, Google tried to fend off the Justice Department’s lawsuit offers to share its ad tech businessThe Wall Street Journal reported.

CNET’s Stephen Shankland contributed to this report.

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