The U.S. Department of Justice has filed suit against Google over alleged antitrust issues, claiming the search giant has monopoly control of the digital ad market. The DOJ is joined by eight states in its complaint, including New York, California, and Colorado. Together they aim to “halt Google’s anticompetitive scheme, unwind Google’s monopolistic grip on the market, and restore competition to digital advertising.”
This action, clearly contemplated for some years, is distinct from a 2020 antitrust suit over Google’s dominance in the online search market, another brought by Epic, and of course its various woes in the European Union.
The lawsuit, filed today in Virginia’s Eastern District federal court, describes a pattern going back to the company’s purchase of DoubleClick in 2008. This “vaulted Google into a commanding position over the tools publishers use to sell advertising opportunities, complementing Google’s existing tool for advertisers, Google Ads, and set the stage for Google’s later exclusionary conduct across the ad tech industry.” The DOJ argues ill intent by Google in architecting the digital ad market in a way that unfairly favors its own products. From the complaint:
One industry behemoth, Google, has 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. Having inserted itself into all aspects of the digital advertising marketplace, Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies.
From there, the DOJ describes the company’s behavior as follows:
Google’s plan has been simple but effective: (1) neutralize or eliminate ad tech competitors, actual or potential, through a series of acquisitions; and (2) wield its dominance across digital advertising markets to force more publishers and advertisers to use its products while disrupting their ability to use competing products effectively.
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Each time a threat has emerged, Google has used its market power in one or more of these ad tech tools to quash the threat. The result: Google’s plan for durable, industry-wide dominance has succeeded.
The enormous complexity of the ad tech market and tools is gone into considerable detail over the course of the 153-page document. But fortunately the DOJ was able to deploy a suitable analogy early on, coined by none other than Google itself via one of its executives in an internal communication:
“Is there a deeper issue with us owning the platform, the exchange, and a huge network? The analogy would be if Goldman or Citibank owned the NYSE.”
You don’t have to be a judge in a federal court to get the feeling that yes, there’s something amiss in that arrangement.
For its part, Google has frequently reiterated that the digital ad market is healthy and competitive, citing strong competitors, including Meta, Amazon, and Microsoft, to name a few. The company is also likely to point to growing competition from platforms such as TikTok and Instacart, which have cut into the significant market share owned by Alphabet and Meta for most of recent history.
In a statement, Google wrote that the “DOJ is 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.” It referred to what it described as a similar case recently dismissed, but the DOJ probably has better lawyers than Texas AG Ken Paxton. Google later expanded on its reasoning in this blog post, listing digital ad markets in which Google is not competitive.
If you want a good grounding in the ad tech world and what Google has done to dominate and manipulate it — this part seems undeniable even if a jury rules it is not monopolistic — the opening section of the lawsuit provides a very readable and chronological account in fairly easy-to-understand language.
Justice Dept v. Google by TechCrunch on Scribd
[This story is developing and the article has been substantially updated throughout.]