US targets Google’s monopoly on online advertising business in latest Big Tech lawsuit

WASHINGTON (Reuters) – The U.S. Justice Department on Thursday sued Alphabet Inc’s Google (GOOGL.O), accusing it of abusing control of its digital advertising business and selling its Ad Manager suite. argued that it should be forced to The government’s latest jab to thwart Big Tech’s market power.

The lawsuit addresses Google’s business, which accounts for 80% of its revenue. The Justice Department has asked the court to force Google to split off a major portion of its ad tech business.

“Google has used anti-competitive, exclusive, and unlawful means to eliminate or substantially reduce its threat to its control over digital advertising technology,” the antitrust complaint states.

Google said the government “replicates a flawed argument that slows innovation, drives up advertising costs and makes growth difficult for thousands of small businesses and publishers.”

The federal government should level the playing field with big tech companies such as Amazon.com (AMZN.O), Facebook owner Meta Platforms (META.O) and Apple (AAPL.O) It is said that

Tuesday’s lawsuit by the administration of Democratic President Joe Biden follows a 2020 antitrust lawsuit filed against Google during the presidency of Republican Donald Trump.

The 2020 lawsuit, which alleges antitrust violations in the way the company obtained or maintains exclusivity in online search, is set to go to trial in September.

8 states in litigation

Eight states, including Google’s home state of California, joined Tuesday’s lawsuit.

California Attorney General Rob Bonta said Google’s practices “stifle creativity in areas where innovation is essential.”

Colorado Attorney General Phil Weiser said Google’s dominance has resulted in higher fees for advertisers and less money for publishers to provide ad space. “By filing this lawsuit, we are taking action to unleash Google’s monopoly and restore competition in the digital advertising business,” he said in a statement.

Google shares fell 1.9% on Tuesday.

In addition to its well-known free search, Google makes money through its affiliated ad tech business. The government has sought to sell the Google Ad Manager suite, which includes AdX, Google’s ad exchange.

Google Ad Manager is a suite of tools that includes tools that allow websites to offer advertising space for sale and exchanges that provide a marketplace that automatically matches advertisers and publishers.

Advertisers and website publishers complain that Google lacks transparency about where their ad dollars go, specifically how much goes to publishers and how much goes to Google. .

Tuesday’s lawsuit raises concerns about specific products in the ad tech stack, where publishers and advertisers buy and sell ad space. That business was about $31.7 billion in 2021, or his 12.3% of Google’s total revenue. About 70% of that revenue goes to publishers.

The company made a series of acquisitions, including DoubleClick in 2008 and AdMob in 2009, which helped it become a dominant player in online advertising.

“Project Poirot”

Google remains the market leader, but Google’s share of U.S. digital ad revenue has declined, dropping from 36.7% in 2016 to 28.8% last year, according to Insider Intelligence.

The Justice Department has asked a jury to decide a lawsuit filed in the U.S. District Court for the Eastern District of Virginia.

The lawsuit shows Google’s numerous attempts to dominate the advertising market, with the government alleging that Google has “technical tools to quell the threat” of its competitors.

The complaint referred to header bidding, a method that allows businesses to bypass Google and bid on advertising space on their websites.

It has a series of projects underway, including one called ‘Project Poirot’, named after Agatha Christie’s detective Hercule Poirot. The project was “designed to identify and effectively respond to ad exchanges that have adopted header bidding techniques.”

The 149-page complaint alleges that Google doubled down after Project Poirot was initially successful in manipulating advertiser spending to reduce competition from competing ad exchanges. Rivals AppNexus/Xandr will lose his 31% of his DV360 advertiser spending, Rubicon will lose 22%, OpenX his 42% and Pubmatic 26%, the complaint says. increase.

Reporting by Diane Bartz and David Shepardson. Additional reporting by Sheila Dang.Editing by Chris Sanders and Grant McCool

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