The US Department of Justice and eight states on Tuesdayclaiming that it abused its monopoly power to harm advertisers and publishers.
The Justice Department’s complaint — which you can read in full below — was filed in federal court in Virginia. It claims that Google has “subverted legitimate competition in the advertising 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 exploiting its dominance to get advertisers to use its products over those of others. The complaint only names Google as the defendant and not any individuals. Google is also claiming to sell part of its advertising technology business.
The DOJ also said that Google penalizes websites that “dare to use competing ad tech products” and uses its dominance in ad tech “to direct more transactions to its tech ad products, extracting inflated fees to stick its own pockets in from the advertisers and publishers they purportedly serve.” .
The case is the latest example of the government’s efforts to rein in Big Tech. The most financially successful corporations on the planet hold enormous power over our lives and over businesses around the world.
Google has rejected these allegations.
“Today’s lawsuit from the Department of Justice attempts to pick winners and losers in the fiercely competitive advertising technology sector,” Google Ads lead Dan Taylor said in a blog post. Google said the lawsuit by the Justice Department largely duplicates an “unsubstantiated lawsuit” brought by Texas Attorney General Ken Paxton and dismissed in federal court. Taylor said the DOJ case is flawed and will “slow innovation, increase advertising fees, and make it harder for thousands of small businesses and publishers to grow.”
The Justice Department did not respond to a request for comment.
Assistant Attorney General Jonathan Kanter said at a news conference Tuesday that while there are some similarities to the Texas case, the Department of Justice has run its own years-long investigation that shows Google maintained “many monopolies.”
The lawsuit filed by the Department of Justice is a rare instance in which the department has called for the dissolution of a major corporation. Other examples include its confrontations with mainframe manufacturer IBM in the 1970s, telephone giant AT&T in 1982, and Windows innovator Microsoft in 2000.
It comes as governments around the world look to rein in big tech companies. The US Senate in the past year or so has thought ofTo reduce the influence of Amazon, Apple and Google in the digital markets. Last year, it was Google A. agreed .
Kanter said Google’s dominance in digital advertising is equivalent to banking companies like Goldman Sachs or Citibank owning the New York Stock Exchange. He said Google has engaged in this behavior for 15 years, inflating advertising costs, diminishing website revenue, stifling innovation and “flattening our generic idea market”. Kanter also claimed that Google’s behavior harmed the US government and military.
Among examples of alleged violations, Kanter said Google:
- Link arrangements are used to lock content creators into the Google system.
- Ad auctions have been manipulated by giving themselves first look and last look advantages over the bidding process.
- Websites were banned from using competing technology and those who attempted to do so were punished.
- Competitor bid data collected and used.
Kanter also used information from Google docs and employees to make a case for the company’s dominance:
- One Google employee said the company’s ad exchange is an “authoritarian broker”.
- Senior executives said that switching publishers’ ad servers is a “nightmare” that “takes a godsend”.
- A Google manager said, “Our goal should be all or nothing. Use the Google Ad Exchange or you don’t get our advertiser order.”
- A Google employee said the company “overcharges” advertisers $3 billion a year, and funnels money to publishers to get them to stick with Google’s advertising technology.
- A Google executive detailed steps to “drain” competitors.
The Computer and Telecommunications Industry Association, a technology lobby group, has sided with Google despite some past support for “appropriate” government intervention: “We find this lawsuit and the radical structural damages it proposes to be unwarranted. Digital services compete aggressively for advertising dollars on screens of all sizes, The complaint appears to ignore these dynamics as well as the overall trends of the global advertising market.”
This is the second antitrust lawsuit the Justice Department has filed against Google but the first from the Biden administration. thatReports filed during the Trump administration alleged that Google blocked competitors by striking deals with Apple and Samsung to be the default search engine on their devices.
Google is also facing, along with 16 states and territories, claim that the search giant worked with Facebook to give the social network an edge in online advertising auctions. The Department of Justice, under the Clayton Antitrust Act, is also allowed to sue if the federal government believes it has been harmed.
Last year, Google tried to dodge a Justice Department lawsuitreported The Wall Street Journal.
CNET’s Stephen Shankland contributed to this report.
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