The Justice Department and a group of states sued Google on Tuesday, accusing it of illegally abusing a monopoly on the technology that powers online advertising, in the agency’s first antitrust lawsuit against a tech giant under President Biden and stepping up legal pressure on one of the world’s largest companies. Internet in the world.
The lawsuit said Google had “perverted legitimate competition in the advertising technology industry by engaging in a systematic campaign to control a wide range of high-tech tools used by publishers, advertisers, and intermediaries, to facilitate digital advertising.” The suit asked the US District Court for the Eastern District of Virginia to compel Google to sell its suite of advertising technology products and to prevent the company from engaging in alleged anti-competitive practices.
It was the fifth antitrust lawsuit US officials have filed against Google since 2020, as lawmakers and regulators around the world try to rein in the power big tech companies wield over information and online commerce. In Europe, Amazon, Google, Apple and others faced antitrust investigations and charges, while regulators did issued new laws To reduce the harm of social media and some practices such as data collection.
In the US it was Meta, the parent company of Facebook and Instagram She filed a lawsuit in 2020 Because of allegations that it illegally crushed the emerging competitors. Google has faced particular scrutiny. In 2020, a group of states led by Texas filed an antitrust lawsuit against it related to advertising technology, while the Department of Justice and another group of states sued Google separately over allegations that it It abused its dominance in Internet search. In 2021, some states have sued Google’s App Store practices.
The Justice Department and Google did not immediately respond to requests for comment.
The Biden administration is trying to use unpopular legal theories to clip the wings of some of America’s largest corporations. The Federal Trade Commission asked a judge to ban Meta from Buy a startup in virtual reality, a rare case that says the deal could hurt potential competition in an emerging market. Agency has it too Challenge Microsoft’s $69 billion buyout video game publisher Activision Blizzard, a notable measure because the two companies are not primarily seen as direct competitors.
The administration’s efforts are expected to meet fierce resistance in federal courts. For decades, justices have held the view that antitrust violations should be determined mostly by whether they drive up prices for consumers. But Jonathan Kanter, head of the Department of Justice’s antitrust division, and Lena Khan, chair of the Federal Trade Commission, He said They are willing to lose cases that allow them to stretch the boundaries of the law and that set corporate America on notice.
Google has been a powerhouse in online advertising for decades. $3.1 billion Purchase In 2007, DoubleClick, a popular advertising tools manufacturer, amplified the reach of its already powerful digital advertising machine. DoubleClick gave Google an important role over 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 had $16.6 billion in annual revenue, primarily from its search engine business. By 2021, the company’s advertising technology division had revenue of $31.7 billion, making it the second largest business unit after the leading search engine. Through the first three quarters of 2022, the unit recorded sales of $24.3 billion.
Google has long faced accusations from online publishers that its control of the digital advertising ecosystem has unfairly drained profits from the sites where the ads are displayed.
One group representing publishers, including The New York Times Company, has pushed Congress to allow sites to negotiate terms of ad deals collectively with Google and other online platforms. Normally, this type of coordination would be illegal under antitrust laws. The publishers’ efforts have so far been unsuccessful.
On Friday, Google announced that it would Lay off 12,000 employees, or 6 percent of its workforce, in response to a slowdown in the digital advertising market. The company said the cuts would allow it to prioritize Projects involving artificial intelligencean area that has been gaining momentum in Silicon Valley in recent months.