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US Government files antitrust suit against Google’s online advertising dominance
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On Tuesday, the U.S. Justice Department filed a lawsuit against Alphabet Inc’s Google, accusing the company of abusing its dominance in digital advertising. The government is threatening to dismantle a key business at the heart of Google, one of Silicon Valley’s most successful internet companies. The government said that Google should sell its ad manager suite. This business generated about 12 percent of Google’s revenues in 2021 but also plays a vital role in the overall sales of the search engine and cloud company. The antitrust complaint states, “Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies.”

Google, whose advertising business is responsible for about 80% of its revenue, has denied the allegations and said that the government was “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.” The federal government has stated that its Big Tech investigations and lawsuits aim to level the playing field for smaller rivals to a group of powerful companies, including, Facebook owner Meta Platforms, and Apple Inc.

Tuesday’s lawsuit by the administration of President Joe Biden follows a 2020 antitrust lawsuit brought against Google during the term of Donald Trump. The 2020 lawsuit alleged violations of antitrust law in how the company acquires or maintains its dominance with its monopoly in online search and is scheduled to go to trial in September.


Eight states joined Tuesday’s lawsuit, including Google’s home state of California. California State Attorney General Rob Bonta said that Google’s practices have “stifled creativity in a space where innovation is crucial.” Colorado Attorney General Phil Weiser said that Google’s dominance had led to higher fees for advertisers and less money for publishers with ad space to offer. “We are taking action by filing this lawsuit to unwind Google’s monopoly and restore competition to the digital advertising business,” he said in a statement.

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In addition to its well-known search, which is free, Google makes revenue through its interlocking ad tech businesses. The government asked for the divestiture of the Google Ad Manager suite, including Google’s ad exchange, AdX. Google Ad Manager is a suite of tools, including one that allows websites to offer advertising space for sale and exchange that serves a marketplace that automatically matches advertisers with those publishers.

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Advertisers and website publishers have complained that Google needs to be more transparent about where ad dollars go, precisely how much goes to publishers and how much to Google. The lawsuit raises concerns about specific products in the ad tech stack, where publishers and advertisers use Google’s tools to buy and sell ad space on other websites. That business was about $31.7 billion in 2021, or 12.3 percent of Google’s total revenue. About 70% of that revenue goes to publishers.

An ad tech divestiture “may not be a game changer, but it could be sneaky important to Google’s ad targeting capability,” said Paul Gallant with the Cowen Washington Research Group. “It connects to all of Google’s other businesses and ties them together. I think Google might be more concerned about losing ad tech down the road than people might think,” Gallant said.

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The company made a series of purchases, including DoubleClick in 2008 and AdMob in 2009, to help make it a dominant player in online advertising. While Google remains the market leader by a long shot, its U.S. digital ad revenue share has been eroding, falling to 28.8% last year from 36.7% in 2016, according to Insider Intelligence.

The United States Department of Justice has filed a lawsuit against Google in the U.S. District Court for the Eastern District of Virginia, requesting that a jury decide the case. The lawsuit accuses Google of attempting to dominate the advertising market and details several specific actions taken by the company. One of the critical issues cited in the complaint is the use of “header bidding,” a technique that allows companies to bypass Google and bid directly on ad space on websites. The lawsuit also mentions a specific project called “Project Poirot,” which aimed to identify and respond to ad exchanges adopting header bidding technology. The complaint alleges that Google used Project Poirot’s success to manipulate advertiser spending and reduce competition from rival ad exchanges, resulting in significant losses for companies such as AppNexus/Xandr, Rubicon, OpenX, and Pubmatic.


U.S. targets Google’s online ad business monopoly in latest Big Tech lawsuit



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