Tough stance: Associate attorney general Vanita Gupta and attorney general Merrick Garland at a media briefing in Washington. The Justice Department and several states are taking Google to court for its alleged dominance in the digital advertising space. — AP
WASHINGTON: The United States Justice Department is suing Alphabet’s Google, accusing the company of abusing its dominance of the digital advertising business, and adding that Google should be forced to sell its ad manager suite, in the government’s latest jab at thwarting Big Tech’s market power.
The lawsuit targets a business at Google that is responsible for 80% of its revenue.
The Justice Department asked the court to compel Google to break up its ad technology business.
“Google has used anti-competitive, exclusionary and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” the antitrust complaint said.
Google responded to the lawsuit, saying the government was “doubling down on a flawed argument that would slow innovation, raise advertising fees and make it harder for thousands of small businesses and publishers to grow”.
The federal government has said it is trying to level the playing field for rivals of big tech companies, including Amazon.com, Facebook owner Meta Platforms and Apple Inc.
Tuesday’s lawsuit by the administration of President Joe Biden, a Democrat, follows a 2020 antitrust lawsuit brought against Google during the term of Donald Trump, a Republican.
The 2020 lawsuit alleged violations of antitrust law in how the company acquires or maintains its dominance with its monopoly in online search and is scheduled to go to trial in September.
Eight states joined the department in Tuesday’s lawsuit, including Google’s home state of California. Google’s shares were down 1.6% on Tuesday.
The lawsuit said “Google has thwarted meaningful competition and deterred innovation in the digital advertising industry”.
In addition to its well-known search, which is free, Google makes revenue through its interlocking ad tech businesses, which connect advertisers with newspapers, websites and other firms looking to host them.
Advertisers and website publishers have complained that Google has not been transparent about where ad dollars go, specifically how much goes to publishers and how much to Google.
The company made a series of purchases, including DoubleClick in 2008 and AdMob in 2009, to help make it a dominant player in online advertising.
While Google remains the market leader by a long shot, its share of US digital ad revenue has been eroding, falling to 28.8% last year from 36.7% in 2016, according to Insider Intelligence.
The Justice Department asked for a jury to decide the case, which was filed in the US District Court for the Eastern District of Virginia.
The lawsuit lays out a number of Google’s attempts to dominate the advertising market, with the government arguing that the company has the “tech tools to quash the threat.” — Reuters
