DOJ Files Second Antitrust Lawsuit Against Google, Seeks to Split Its Ad Business

DOJ Files Second Antitrust Lawsuit Against Google, Seeks to Split Its Ad Business
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Alphabet and Google CEO Sundar Pichai meets with the Polish Prime Minister at the Chancellery in Warsaw, Poland on March 29, 2022.

Mateusz Wlodarczyk | nur photo | fake images

The US Justice Department filed its second antitrust lawsuit Tuesday against Google in just over two years. It’s the latest sign that the US government isn’t backing down on cases against tech companies, even in light of a mixed court record in antitrust lawsuits.

Google shares fell 1.3% on Tuesday afternoon.

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This lawsuit, which focuses on of Google online advertising business and seeks to have Google divest parts of the business, is the first brought against the company under the Biden administration. the Department previous demand, filed in October 2020 under the Trump administration, accused Google of using its alleged monopoly power to eliminate competition from internet search through opt-out agreements. that case is expected to go to trial in September.

Google’s advertising business generated $54.5 billion in the quarter ended September 1. 30 Search, YouTube, Google Network Ads, and other advertising.

Google also faces three other antitrust lawsuits from large groups of state attorneys general, including one focused on his advertising business run by Texas Attorney General Ken Paxton.

The states of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia joined the DOJ in the latest lawsuit.

Google’s advertising business has drawn criticism because the platform operates on multiple sides of the market — buying, selling, and an ad exchange — giving it unique insight into the process and potential leverage. The company has long denied that it dominates the online advertising market, pointing to the market share of competitors, including Facebook’s Meta.

In their lawsuit, the Justice Department and the states argue that Google sought to control all sides of the market, realizing that it “could become ‘the primary and final location for all ad serving.'”

“Google would no longer have to compete on merit, it could simply set the rules of the game to exclude rivals,” they allege.

They also claim that Google acquired other companies, including its 2008 acquisition of publisher ad server DoubleClick and a “fledgling ad exchange” that would become Google’s AdX, to increase its market power and “set the stage for the Google’s Subsequent Exclusionary Conduct Worldwide”. advertising technology industry.

“In effect, Google was robbing Peter (the advertisers) to pay Paul (the publishers), while also charging a hefty transaction fee for its own prime position in the medium,” the executors allege. “Instead of helping fund website publishing, Google was siphoning ad dollars for itself by imposing supra-competitive fees on its platforms. A rival publisher’s ad server couldn’t compete with Google’s inflated ad prices. , especially without access to Google’s captive advertiser demand for Google Ads.”

The progressive head of the Justice Department’s Antitrust Division, Jonathan Kanter, was recently cleared to work on Google-related matters. The Wall Street Journal reported earlier this month. Bloomberg It had previously reported that Kanter was not allowed to work on company-related matters while the department considered Google’s request to review its grounds for recusal. Before his time in government, Kanter represented some of Google’s rivals and critics, including Yelp Y news corporation.

A Google spokesperson said in a statement last year that Kanter’s past work and statements “raise serious concerns about his ability to be impartial.”

Google is far from the only tech giant that has come under scrutiny from the federal government. At the Federal Trade Commission, Goal is also the subject of two antitrust lawsuits, as is Microsoft proposed acquisition of Activision.

Google and other technology companies have also faced increased scrutiny from abroad, particularly in Europe, where Google has also fought multiple antitrust cases and new regulations threaten major changes in technology business models.

Google did not immediately provide comment on the lawsuit. The company reports earnings on February 2. 2.

This story is unfolding. Please check back for updates.

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