Is Google a monopoly? That’s the core question at the center of numerous lawsuits over the years spanning apps, maps, search and more.
Now it’s driving a new, rather notable complaint: On Tuesday, the Department of Justice filed suit in Virginia’s Eastern District federal court over the company’s ad tools, in what could become a landmark case to unravel the tech “behemoth.”
Joined by eight states — California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia — the DOJ accused Google of anticompetitive practices by wielding its ad tech tools to eliminate threats to its market dominance. According to the scenario laid out by the complaint, this should matter to anyone who creates online content.
“The internet provides the public with unprecedented access to ideas, artistic expression, news, commerce and services. Content creators span every conceivable industry; they publish diverse material on countless websites that inform, entertain and connect society in vital ways. Yet the viability of many of these websites depends on their ability to sell digital advertising space,” the filing read.
“But competition in the ad tech space is broken, for reasons that were neither accidental nor inevitable. 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.”
The complaint went on to allege that Google eradicated competitors by swallowing them up via mergers, and pressured publishers and advertisers into using its ad products.
Diminished competition, however, can have far-reaching effects. “When website publishers get less ad revenue because of Google’s monopolies, they have to either lower the quality of their website, or pass on costs to consumers,” alleged New York State Attorney General Letitia James. “I am proud to partner with the Department of Justice and fellow attorneys general in pushing back against Google’s illegal actions. I will not allow companies, no matter how large or powerful, to take advantage of New York consumers or small businesses.”
Google’s statement to the press appeared to flip that script: Framing the DOJ’s allegations as something akin to business interference — as “attempts to pick winners and losers in the highly competitive advertising technology sector” — a representative called the argument “flawed” and pointed instead to how it would “slow innovation, raise advertising fees and make it harder for thousands of small businesses and publishers to grow.”
This isn’t the first time the tech giant has faced scrutiny over its online advertising business. For instance, in 2020, Texas Attorney General Ken Paxton accused Google of striking an unlawful agreement with Facebook that would grant the social media company special privileges if it pledged not to support an ad competitor. A judge struck down some of the main points in that case, but allowed others to proceed.
Texas helmed another complaint in 2021 that started with Google’s app store and via amendments evolved to focus more on its ad exchange — a business where Google is simultaneously the largest buyer and the largest seller on a massive exchange that it owns, which presents an obvious conflict of interest. Seventeen states joined the complaint, which accused the company of being “pitcher, batter and umpire, all at the same time.”
Others in the U.S., as well as Europe and other regions, are scrutinizing the company’s practices and ad technology. The reason should be obvious: When it comes to the various parts of the digital ad supply chain, Google’s vast advertising machinery controls more than 90 percent, according to multiple studies.
Now the DOJ wants to “halt Google’s anticompetitive scheme, unwind Google’s monopolistic grip on the market and restore competition to digital advertising.” Apparently the department has been preparing the lawsuit for years, but it’s culminating now at an intriguing time.
It’s not the first antitrust case lobbed at Google, but it’s the first shot by the Biden administration — and, in fact, its first major antitrust action against Big Tech.
The matter also marks a rarity in these polarized political times: a bipartisan-backed effort. Because regardless of party, pretty much everyone on both sides of the aisle is worried about Big Tech running amok.