The U.S. Department of Justice (DOJ) has filed a landmark antitrust lawsuit against Google, focusing on the tech giant’s lucrative advertising technology business. This lawsuit, filed following an investigation by the U.S. government and over a dozen states, centers on Google’s $31 billion advertising business, which is responsible for placing banner ads on millions of websites.
The trial is set to begin later today in the Eastern District of Virginia, with U.S. District Judge Leonie Brinkema presiding over the opening statements. The BBC reports that the DOJ plans to argue that Google’s parent company, Alphabet, has illegally monopolized the online advertising market. However, Alphabet denies these allegations, claiming its success is due to the effectiveness of its services.
The DOJ alleges that Google established its monopoly by engaging in anti-competitive acquisitions of smaller advertising technology competitors, as well as bullying website publishers into using its advertising products. The company is also accused of controlling key aspects of the advertising supply chain in an unethical manner, which raised ad rates for advertisers while reducing the share of revenue for website owners.
The DOJ points out that Google systematically abused its online advertising business and is seeking to have the court break up the company’s advertising technology monopoly. The agency believes this will create new opportunities for Google’s small competitors and encourage new entrants into the market, which is beneficial for advertisers and publishers alike.
However, Google claims that it is just one of hundreds of companies engaged in the online advertising business, including other tech giants like Meta, Apple, Amazon, and TikTok. The company argues that the monopoly allegations are without merit and claims that competition in the digital advertising industry is intensifying, not diminishing as the lawsuit suggests.
Google also notes that companies like Comcast, Disney, Walmart, and Target are investing in their own online advertising services alongside tech giants. The company adds that many other professional digital advertising companies are also thriving, including AppLovin, Criteo, Index Exchange, Pubmatic, Magnite, MediaMath, OpenX, The Trade Desk, and Unity.
In light of the existence of hundreds of competitors, Google will argue that splitting its advertising business would only benefit other large advertising technology companies and harm small websites that rely on its tools.
This latest antitrust trial against Google comes just one month after Alphabet was found guilty of illegal monopolization in its search business. According to the U.S. District Court for the District of Columbia, Google’s search business violated U.S. antitrust laws by using billions of dollars to secure its dominant position as the default search provider for global smartphones and web browsers at the expense of smaller competitors like Bing, Yahoo, and DuckDuckGo.
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