Justice Department Sues Google for Monopolizing Digital Advertising Technologies
DoJ claims that through serial acquisitions and anticompetitive auction manipulation, Google subverted competition in internet advertising technologies
![U.S. Department of Justice](https://cdn.mos.cms.futurecdn.net/PbSdSrXW3xzHJC66k2xdA.jpg)
WASHINGTON, D.C.—The U.S. Department of Justice and the Attorneys Generals of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia, have filed a civil antitrust suit against Google accusing the tech giant of monopolizing multiple digital advertising technology products in violation of Sections 1 and 2 of the Sherman Act.
Filed in the U.S. District Court for the Eastern District of Virginia, the complaint alleges that Google monopolizes key digital advertising technologies that website publishers depend on to sell ads and that advertisers rely on to buy ads and reach potential customers.
If successful, the complaint could have an important impact on the rapidly growing digital advertising business local broadcasters and media companies are trying to build.
“For years, broadcasters have been sounding the alarm over the anti-competitive practices of the Big Tech platforms, including Google," an NAB spokesperson said in response to the suit. "Their dominant role in the marketplace has come at a steep price for local news broadcasters, who lose an estimated $2 billion annually by providing their content to these platforms under ‘take it or leave it’ terms. We continue to work with our congressional allies to address these inequities and urge Congress to move swiftly to level the playing field.”
As a result of its illegal monopoly, the Department of Justice (DoJ) claims that 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 complaint alleges that 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. 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, the DoJ said.
“Today’s complaint alleges that Google has used anticompetitive, exclusionary, and unlawful conduct to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” said Attorney General Merrick B. Garland. “No matter the industry and no matter the company, the Justice Department will vigorously enforce our antitrust laws to protect consumers, safeguard competition, and ensure economic fairness and opportunity for all.”
Get the TV Tech Newsletter
The professional video industry's #1 source for news, trends and product and tech information. Sign up below.
As a result of the alleged anti-trust violations, the DoJ noted that Google now controls the digital tool that nearly every major website publisher uses to sell ads on their websites (publisher ad server); it controls the dominant advertiser tool that helps millions of large and small advertisers buy ad inventory (advertiser ad network); and it controls the largest advertising exchange (ad exchange), a technology that runs real-time auctions to match buyers and sellers of online advertising.
In response to the lawsuit, Google told CNN said the DOJ suit “attempts to pick winners and losers in the highly competitive advertising technology sector.”
“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,” a Google spokesperson told CNN.
CNN also reported that a federal judge last year knocked down a claim that Google colluded with Facebook in a separate antitrust suit led by the state of Texas. That judge also ruled, however, that a number of monopolization claims in the Texas case could move forward.
More specifically the new anti-trust lawsuit accused Google of these anticompetitive activities:
- 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.
- 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. Google’s anticompetitive conduct has suppressed alternative technologies, hindering their adoption by publishers, advertisers, and rivals, the DoJ said.
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. 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, the DoJ said.
In 2020, the Justice Department filed a civil antitrust suit against Google for monopolizing search and search advertising, which are different markets from the digital advertising technology markets at issue in the lawsuit filed today. The Google search litigation is scheduled for trial in September 2023.
George Winslow is the senior content producer for TV Tech. He has written about the television, media and technology industries for nearly 30 years for such publications as Broadcasting & Cable, Multichannel News and TV Tech. Over the years, he has edited a number of magazines, including Multichannel News International and World Screen, and moderated panels at such major industry events as NAB and MIP TV. He has published two books and dozens of encyclopedia articles on such subjects as the media, New York City history and economics.