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Google Sued By Justice Dept. For Dominance In Digital Advertising

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Google Sued By Justice Dept. For Dominance In Digital Advertising

(CTN NEWS) – WASHINGTON – On Tuesday, the Justice Department and eight states filed an antitrust lawsuit against Google to break up what they claim is the company’s monopoly over the entire online advertising ecosystem.

This harms advertisers, consumers, and even the United States federal government.

According to the government, Google’s strategy for establishing dominance has been to “neutralise or remove” competitors through acquisitions and to compel advertisers to use its products by making it challenging for them to use those of rivals.

The federal court in Alexandria, Virginia, received the antitrust lawsuit. In a press conference on Tuesday, Attorney General Merrick Garland claimed that “for 15 years.

Attorney General Merrick Garland, joined by Associate Attorney General Vanita Gupta and Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division, speaks at the Department of Justice in Washington, Tuesday, Jan. 24, 2023. (AP Photo/Carolyn Kaster)

Google has pursued a course of anticompetitive conduct” that has stunted the development of competing technologies and tampered with online ad auction procedures to compel advertisers and publishers to use its products.

He continued, “Google has engaged in exclusionary activity” as a result, the competition in the ad tech sector has been “severely degraded,” if not entirely destroyed.

“First, almost every major online publisher uses Google-controlled technology to sell advertising space on their websites. Second, Google owns the primary mechanism businesses use to purchase that advertising space.

Third, according to Garland, Google owns the largest ad exchange, which connects publishers and advertisers each time advertising space is purchased.

He continued, “as a result, website owners make less money while advertising spends more.”

And because of this, fewer publishers will be able to distribute their material without charging users for subscriptions, paywalls, or other forms of payment.

Attorney General Merrick Garland speaks at the Department of Justice in Washington, Tuesday, Jan. 24, 2023. The Justice Department and eight states sued Google on Tuesday, alleging that its dominance in digital advertising harms competition. (AP Photo/Carolyn Kaster)

The department’s lawsuit accuses Google of monopolizing internet advertising by banning rivals.

This includes deploying technology that locks in the split-second bidding process for ads shown on web pages after its 2008 acquisition of DoubleClick, a powerful ad server.

Large publishers with sizable direct sales can manage their adverts using Google’s ad manager. A real-time marketplace for buying and selling internet display adverts is the ad exchange.

The complaint asks that Google separate three distinct businesses from its main businesses: search, YouTube, and other products like Gmail.

These three businesses are the buying and selling of adverts and the ownership of the exchange where that activity is conducted.

The lawsuit “doubles down on a false premise that would delay innovation, increase advertising rates, and make it more difficult for thousands of small businesses and publishers to succeed,” according to a statement from Alphabet Inc., the parent company of Google.

Attorney General Merrick Garland looks to Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division as he speaks at the Department of Justice in Washington, Tuesday, Jan. 24, 2023.. (AP Photo/Carolyn Kaster)

A trade association for internet services, of which Google is a member, criticized the lawsuit and its “radical structural remedies” as being inappropriate.

The assertion by the government that digital ads aren’t in competition with print, broadcast, and outdoor advertising defies rationality, according to Matt Schruers, president of the Computer & Communications Industry Association.

Dina Srinivasan, a fellow at Yale University and an expert in adtech, called the action “significant” since it unites the state and federal governments of the entire country in a politicized legal campaign against Google.

According to Srinivasan, online advertising is ” dysfunctional and ineffective.”

It is “an outrageous inefficiency to have baked into the US economy” because intermediaries receive 30% to 50% of the take on each ad trade.

“A tremendous tax on the open internet and customers in general,” she referred to it as. Additionally, it directly impacts whether a free press can exist.

It has taken time for federal and state authorities and legislators to catch up with and comprehend the internet ad industry, similar to many other extremely sophisticated technical marketplaces.

According to Srinivasan, it took them ten years to realize the dangers of high-speed trading in the financial markets and start taking steps to prevent it.

According to research firm Insider Intelligence, Google had close to 29% of the U.S. digital advertising industry in 2022, which includes all the advertisements people see on computers, phones, tablets, and other internet-connected devices.

Meta, the parent company of Facebook, is second with around 20% of the market. With more than 11%, Amazon is a far-off third place that is rising.

According to Insider, Amazon and TikTok are predicted to grow, while Google and Meta’s ads market share will decrease.

The Justice Department or regional state governments have recently filed a lawsuit against Google.

For instance, the Trump administration and 11 state attorneys general filed a lawsuit against Google in October 2020, saying that the company had engaged in anticompetitive behavior in the search and search advertising industries.

Attorney General Merrick Garland, joined by Associate Attorney General Vanita Gupta, speaks at the Department of Justice in Washington, Tuesday, Jan. 24, 2023. The Justice Department and several states have sued Google, alleging that its dominance in digital advertising harms competition. (AP Photo/Carolyn Kaster)

The Justice Department’s top antitrust official, Assistant Attorney General Jonathan Kanter, responded,

“We conducted our own investigation, and that investigation occurred over many years,” when questioned about why the department would file the lawsuit when states have already filed similar complaints.

He asserted that the nearly 150-page Justice Department case has “many facts, many instances that individually and collectively” demonstrate several monopolies.

In essence, the Biden administration and the new states are aligned with the 35 states and the District of Columbia that sued Google in December 2020 over the same concerns thanks to Tuesday’s complaint.

California, Virginia, Connecticut, Colorado, New Jersey, New York, Rhode Island, and Tennessee are among the states that are party to the lawsuit.

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