U.S. accuses Google of abusing ad tech monopoly

The Justice Department and a group of states sued Google on Tuesday, alleging it illegally abused its monopoly on technology that supports online advertising, the agency’s first antitrust lawsuit against a tech giant under President Joe Biden and one Legal pressure on the company escalates. The world’s largest Internet company.

The lawsuit alleges that Google “undermines legitimate competition in the ad technology industry by engaging in a systemic campaign to control a broad range of high-tech tools used by publishers, advertisers, and brokers to facilitate digital advertising.” The lawsuit seeks the U.S. Eastern District of Virginia The district court compelled Google to sell its suite of advertising technology products and prevented the company from engaging in alleged anticompetitive practices.

It is the fifth antitrust lawsuit against Google by U.S. officials since 2020, as lawmakers and regulators around the world try to rein in the influence big tech companies wield over online information and commerce. In Europe, Amazon, Google, Apple and others face antitrust investigations and charges, while regulators have passed new laws to limit social media harms and practices such as data collection.

In the US, Meta, the parent company of Facebook and Instagram, was indicted in 2020 for allegedly illegally suppressing emerging competitors. Google faces particular scrutiny. In 2020, a group of states led by Texas filed an antitrust lawsuit against it involving ad technology, while the Justice Department and another group of states separately sued Google, accusing it of abusing its dominance in online search. In 2021, some states also sued Google over its app store practices.

The Justice Department and Google did not immediately respond to requests for comment.

The Biden administration is trying to use unusual legal theory to sever the wings of some of America’s largest corporations. The Federal Trade Commission has asked a judge to block Meta’s acquisition of a virtual reality startup, a rare case arguing that a deal could hurt potential competition in an emerging market. The agency also cast doubt on Microsoft’s $69 billion acquisition of video game publisher Activision Blizzard, a notable move because the two companies are not primarily seen as direct competitors.

The administration’s efforts are expected to face strong resistance in federal court. For decades, judges have subscribed to the idea that violations of antitrust laws depend largely on whether they raise prices for consumers. But Jonathan Kanter, head of the Justice Department’s antitrust division, and Lina Khan, chair of the Federal Trade Commission (FTC), said they were willing to lose to allow them to stretch the boundaries of the law and put corporate America in the spotlight. case.

Google has been a force in online advertising for decades. It bought popular advertising tools maker DoubleClick for $3.1 billion in 2007, expanding the reach of its already powerful digital advertising machine. DoubleClick gave Google a pivotal role in the rest of the internet, providing a marketplace for publishers and allowing Google to host more ads on sites across the web.

At the time, Google’s annual revenue was $16.6 billion, mostly from its search engine business. The company’s ad tech unit will generate $31.7 billion in revenue by 2021, making it the second-largest business unit behind its flagship search engine. Through the first three quarters of 2022, the unit has sales of $24.3 billion.

Google has long faced accusations from online publishers that its control of the digital advertising ecosystem unfairly dents the profits of sites that display their ads.

A group representing publishers, including The New York Times Company, has urged Congress to allow the sites to negotiate the terms of advertising deals with Google and other online platforms. Generally, such coordination is illegal under antitrust laws. The publisher’s efforts have so far been unsuccessful.

On Friday, Google announced it would lay off 12,000 workers, or 6% of its workforce, in response to a slowdown in the digital advertising market. The company said the layoffs will allow it to prioritize projects involving artificial intelligence, a field that has boomed in Silicon Valley in recent months.

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