The Justice Department and eight states sued Google on Tuesday, accusing it of stifling competition with its dominance in the online advertising market and demanding that it be split up.
The move is the Biden administration’s first blockbuster antitrust lawsuit against big tech companies.The eight states participating in the lawsuit include California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia. increase.
In Washington, lawmakers and regulators have frequently voiced concerns about the power of tech giants, but have so far been unable to pass new laws and regulations that could bind the company and its associates. bottom.
Google’s extensive role in the digital ecosystem, which enables advertisers to place ads and publishers to provide digital advertising space, represents a conflict of interest that Google has exploited anticompetitively for years, he said. Google critics have argued for some time.
on Tuesday ComplaintIn a copy seen by CNN, the DOJ alleges that Google is actively and illegally maintaining its dominance by engaging in anti-competitive campaigns. Google has devoured rivals through anti-competitive mergers and bullied publishers and advertisers into using its own ad tech product, according to the US government.
At a press conference on Tuesday, Attorney General Merrick Garland said Google’s anti-competitive behavior has led to 15 years of declining advertising revenues for websites and publishers and rising advertising spending for marketers. Even the U.S. government has been affected, according to the complaint, which names the U.S. Army as one of several government advertisers using Google’s tools. Since 2019, the U.S. government has spent him $100 million on online advertising purchases, according to the complaint.
As part of the lawsuit, the US government has broken up Google and asked the court to order it to spin off at least the online advertising exchange and ad servers for publishers.
The U.S. government believes that Google will “strike legitimate competition in the ad tech industry by engaging in a coordinated campaign to seize control of a wide range of high-tech tools used by publishers, advertisers, and brokers to facilitate digital advertising.” Having entered every aspect of the digital advertising market, Google has used anti-competitive, exclusive and illegal means to eliminate or significantly reduce threats to its dominance in digital advertising technology. .”
The lawsuit was filed in the United States District Court for the Eastern District of Virginia.
Tuesday’s lawsuit is the second federal antitrust lawsuit against Google since 2020. Trump administration sues Regarding Google’s alleged anti-competitive damages in search and search advertising. That case is still ongoing. Google is also subject to antitrust lawsuits by state and private parties.
In a statement, Google said the Justice Department lawsuit “seeks to pick winners and losers in the highly competitive ad tech arena.”
“DOJ is complicit in flawed claims that slow innovation, drive up advertising costs, and make growth difficult for thousands of small businesses and publishers,” a Google spokesperson said. Last year, Google colluded with Facebook in another antitrust lawsuit led by Texas. But that judge also ruled that many exclusive claims in the Texas lawsuit could move forward.
When asked for a response to Google’s statement, Garland said on Tuesday: Pick someone who violates antitrust laws. Those are the people we sue. ”
The lawsuit is a frontal assault on Google’s large, core business: advertising. According to Google, in 2021 he will generate $209 billion in ad revenue. annual report, a figure that accounts for more than 80% of total revenue. By comparison, Meta, the parent company of Facebook, the next biggest giant in online advertising, $115 billion 2021 years. (Tuesday’s lawsuit covers a portion of Google’s advertising revenue, represented by display ads, a business worth about $32 billion for the company.)
third party quote suggestion Google and Facebook account for the majority of U.S. digital advertising revenue, peaking around 2017, with Google accounting for about a third of the market. But since then, other companies have started getting into that business, including Amazon.
Google not only controls the platform publishers use to sell their online ad inventory, but also the advertising tools marketers use to claim that inventory and the exchanges that facilitate their trading. The Justice Department claimed Tuesday.
“Google’s reach across the ad tech industry has been questioned by its own digital advertising executives,” the complaint said, adding that “at least one of them properly asked the question.[I]Do we have a deeper problem with owning platforms, exchanges and huge networks? Think of Goldman or Citibank owning the New York Stock Exchange. ”
Tuesday’s complaint marks the first salvo against Big Tech by DOJ antitrust chief Jonathan Cantor.Cantor spent many months foundation building It reflects a commitment by President Joe Biden and the rest of the U.S. government to hold powerful companies accountable for broader attacks on the tech industry’s most dominant companies. Under Kanter, Justice Department antitrust officials have pushed to bring more cases to trial and prosecute cases involving unconventional legal theories.
Kanter told reporters on Tuesday that Google was exploiting its “long-standing monopoly in digital advertising technology” to its advantage.
“According to Google’s own documents, it is estimated that it retains at least 30 cents of each ad spend that flows through Google’s advertising tools,” said Kanter, adding that in some circumstances this figure could be much higher. He added that it could be higher.
2020, congressman released 450 page report We can see that Google, along with Amazon, Apple, and Facebook, holds “monopoly power” in key business segments. The report was the result of his 16-month research in which congressional officials scrutinized company documents and interviewed numerous customers and competitors in the tech industry. Among other things, it concluded that Google is uniquely positioned to benefit from its strong role in the online advertising industry.
“As a major supplier of the ad space, with a sizeable share of the ad exchange and ad brokerage markets, Google acts on behalf of publishers and advertisers, while also doing business on its own behalf,” the report said. said.