The United States Department of Justicetogether with the states of Virginia, California, Colorado, Connecticut, New Jersey, New York, Tennessee and Rhode Island filed a lawsuit last Tuesday against Google for monopolizing, unfairly eliminating competition, the entire advertising market.
In this way, the US justice system has demanded that the Court of the Eastern District of Virginia force the company to spin off part of its advertising business. The text of the lawsuit has emerged and it accuses the company owned by alphabet to have used anti-competitive, exclusive and illegal means to reduce any type of threat to your domain in digital advertising technologies.
The Secretary of Justice, merrick garland, assured in a press conference on January 24 that in this situation web creators earn less and advertisers earn more. Google’s policy directly violates the Sherman Antitrust Actso the lawsuit requires him to separate three different businesses from his search engine, YouTube and Gmail.
This news has been echoed by countless international media, since it supposes that the company sells at least Google Ad Manger, including its ad server, as well as the full range of Double Click tools and the AdX ad trading platform. However, the resolution of the case could take years.
The US Department of Justice is very severe in this regard, as it ensures that “competition in the ad tech space is broken for reasons that have not been accidental or inevitable”. Google is accused of cracking down on legitimate competition in ad technology, taking control of tools used by publishers, advertisers and brokers to push digital advertising and preventing consumers from learning about other offers. This situation allows you control 30% of Internet advertising campaigns.
Google’s figures
Google currently dominates the US digital advertising market, which is valued at $279 billion. Most of their income comes from advertising. Without going any further, in 2021 they obtained 209,000 million euros through this financing channel, which represents 81% of the total.
That Google is the most important advertising company in the world is no coincidence, since with the acquisition of advertising technology it has been gaining a preferential position over its main adversaries. This is how, in 2007, it acquired Double Click (to sell display ads on websites) and in 2010 it acquired admob (a mobile advertising network).
Google’s way of managing its ads allows large advertisers with direct sales to run their own ads on the Internet, creating a very limited market in which the tech giant takes all the profit margins.
A lawsuit with precedents
Although it is the first time that the administration Biden takes legal action against Google, its predecessor Donald Trumphas already launched a rigorous investigation against one of the largest technology companies in the country to try to curb its monopoly power.
On the part of the Department of Justice, it is the second antitrust lawsuit filed against Google and the fifth in the US against illegal commercial practices. In that first lawsuit in 2020, it was alleged that it had engaged in monopolistic practices to dominate the Internet search sector and advertising in them.
One would have to go back to 1982 to find a similar case, when the US judicial body requested the dissolution of the company Bell accusing her of dismantling the telecommunications system.
