On January 24, the U.S. Department of Justice (DOJ) filed an antitrust lawsuit against Google. This antitrust lawsuit asserts that Google has a monopoly on multiple digital advertising products. It is aiming to break up its ad division. This is a big deal and here’s why:
The lawsuit wants Google to separate the Google Ad Manager suite. This would split Google Ads, DoubleClick, and Google Ad Exchange. We are looking at potential major implications down the road.
The DOJ claims “through serial acquisitions and anticompetitive auction manipulation, Google subverted competition in internet advertising technologies.”
In the suit, the DOJ laid out what Google’s anticompetitive conduct has included:
- Acquiring Competitors: Engaging in a pattern of acquisitions to obtain control over key digital advertising tools used by website publishers to sell advertising space;
- Forcing Adoption of Google’s Tools: Locking in website publishers to its newly-acquired tools by restricting its unique, must-have advertiser demand to its ad exchange, and in turn, conditioning effective real-time access to its ad exchange on the use of its publisher ad server;
- Distorting Auction Competition: Limiting real-time bidding on publisher inventory to its ad exchange, and impeding rival ad exchanges’ ability to compete on the same terms as Google’s ad exchange; and
- Auction Manipulation: Manipulating auction mechanics across several of its products to insulate Google from competition, deprive rivals of scale, and halt the rise of rival technologies.
Google responded in a post by saying that “the Department of Justice attempts to pick winners and losers in the highly competitive advertising technology sector.” They further explained “Today’s lawsuit from the Department of Justice attempts to pick winners and losers in the highly competitive advertising technology sector. It largely duplicates an unfounded lawsuit by the Texas Attorney General, much of which was recently dismissed by a federal court. DOJ is 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.”
This isn’t the first antitrust lawsuit
We’ve been down this road before! In 2020, ten states filed a complaint against Google alleging it held a monopoly over its digital ad business and violated antitrust laws. The Department looked to restore competition in Search and Search Advertising Markets.
In 2021, a lawsuit against Facebook was unsuccessful in showing that it had a monopoly on social media. In the same year, the DOJ also accused Google of domination over search by endorsing huge deals with partners like Apple and taking strides to lessen competition.
While this isn’t the first time Google has faced challenges, it is the biggest and most serious case yet. This lawsuit though is the first major case under the current administration and could potentially be the largest attempt at dismantling a top tech company in decades.
Chacka’s Hot Takes:
We asked a few of our thought leaders about their thoughts on yesterday’s filing. Here’s what they had to say:
“This is always interesting to watch it play out. In the game of Monopoly, the person that plays the best game wins. Sometimes the other players don’t like the tactics they use along the way and the winner often thinks of tactics that no one else considered. I know one thing for sure. Google has been a key driver of innovation across many industries and that has been anchored in the United States. If Google is broken up, innovation will be stifled. I don’t have all the answers, but I do feel like this is an important moment for Americans to truly understand the difference between Capitalism, Communism, and Socialism….because your ideals probably aren’t what you think they are. If capitalism continues to prevail, then we won’t see any changes with Google.”-Janel Laravie, CEO & Founder, Chacka Marketing
“It is interesting because, in the case of Facebook, antitrust arguments can be made as they acquire companies that it has seen as a threat to expand its reach. The same thing can be said when we see other media companies consolidate and acquire one another. In the case of Google, it is a bit disingenuous to point to their model and compare it to Meta. Google has made acquisitions to increase their reach with YouTube, but it’s when they moved to also control the ad ecosystem with DoubleClick that they ventured down a whole other avenue.”– Shane Ragiel, Sr. Director of Strategy, Chacka Marketing
What’s Next? No matter where you stand on the issue, this is certainly going to be a hot topic and one to watch in the coming months. The case is expected to go to trial in September of this year and we will continue to keep our clients and followers up to date on the latest developments.