DOJ sues Google for Monopoly in Digital Advertising

The Department of Justice (DOJ) has filed a lawsuit against Google, accusing the tech giant of creating a monopoly in the digital advertising business over the course of 15 years. The DOJ alleges that Google “corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers and brokers, to facilitate digital advertising.” Eight state attorneys general have joined in the suit, which was filed in Virginia federal court.

Google has responded to the lawsuit by stating that it “attempts to pick winners and losers in the highly competitive advertising technology sector.” The company also argued that the suit is based on the same flawed argument that underpinned a similar lawsuit in Texas and would hinder innovation, raise ad fees, and hurt small businesses.

The DOJ is seeking to force Google to sell its ad technology products, a move that would split up Google’s most valuable business ventures and diffuse the company’s vast power over the internet. This move is called “divestiture of the ad tech stack” by Attorney General Merrick Garland.

Google is the dominant player in the digital advertising market. The company’s biggest money maker is Google Search, where promoted results in user queries drive the vast majority of its revenue. And together with Chrome, the world’s most popular browser, Search gives Google control of the world’s biggest funnel of consumer data. However, Google’s ad empire doesn’t stop at services with the word Google in their names. The company also serves a lion’s share of the ads across apps and websites owned by other companies. Google tools collect data to identify who’s visiting a website; Google decides which ads to show them; and Google sells space to the advertisers buying those ads.

Google is also facing other antitrust cases filed by state attorneys general and an anti-trust case filed during the Trump administration related to accusations that the company’s contracts with other business are anti-competitive. That case is anticipated to go on trial later this year. Google and its tech rivals face an even greater threat across the Atlantic, where EU regulators have hit the tech industry with several recent antitrust challenges and investigations. An EU law called the Digital Markets Act, which goes into effect early this year, could have major implications for competition among tech companies, placing limits on everything from ad tracking to self-preferencing by gatekeepers.

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