By: Sterling Mosley – January 24, 2023
On Tuesday the Department of Justice announced that it has filed a lawsuit against Alphabet Inc., the parent company of Google, that could see the tech giant be broken up.
The lawsuit alleges that Google abuses its role as the biggest broker and supplier of ads on the internet that promote anti-competitive practices against potential competition.
“Over the past 15 years, Google has engaged in a course of anticompetitive and exclusionary conduct that consisted of neutralizing or eliminating ad tech competitors through acquisitions; wielding its dominance across digital advertising markets to force more publishers and advertisers to use its products; and thwarting the ability to use competing products,” the Department of Justice explained. “In doing so, Google cemented its dominance in tools relied on by website publishers and online advertisers, as well as the digital advertising exchange that runs ad auctions.”
According to the DOJ, Google’s anticompetitive behavior includes buying up competitors, forcing the adoption of Google’s tools for website publishers, distorting auction competition by limiting bidding for ad companies, and manipulating auctions to its own advantage.
“As a result of its illegal monopoly, and by its own estimates, Google pockets on average more than 30% of the advertising dollars that flow through its digital advertising technology products; for some transactions and for certain publishers and advertisers, it takes far more.” the DOJ press release states. “Google’s anticompetitive conduct has suppressed alternative technologies, hindering their adoption by publishers, advertisers, and rivals.”
The lawsuit argues that the court should break up Google’s previous acquisitions of other companies such as its 2008 purchase of the ad company DoubleClick, as reported by The Wall Street Journal.
Big tech has seen a flurry of lawsuits and potential regulation thrown at them in recent years. The Wall Street Journal reports that the Justice Department is currently investigating Apple, the Federal Trade Commission has sued Facebook for antitrust practices and blocked Microsoft from purchasing Activision Blizzard, and the European Union is also investigating Facebook for monopolistic practices.
“The Sherman Act embodies America’s enduring commitment to the competitive process and economic liberty. For over a century, the Department has enforced antitrust laws against unlawful monopolists to unfetter markets and restore competition. To redress Google’s anticompetitive conduct, the Department seeks both equitable relief on behalf of the American public as well as treble damages for losses sustained by federal government agencies that overpaid for web display advertising,” the DOJ explained the unprecedented step to protect consumers and other businesses. “This enforcement action marks the first monopolization case in approximately half a century in which the Department has sought damages for a civil antitrust violation.”
In response to the lawsuit, a spokesperson for Google stated that the lawsuit “attempts to pick winners and losers in the highly competitive advertising technology sector.”
While Google has enjoyed years of unbridled dominance at the top of the tech industry, those days could be coming to an end. Their monopolistic practices have landed them in hot water with the Justice Department and if successful, this lawsuit could bring one of the biggest shakeups in the business world in decades.
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