The Biden administration’s Department of Justice (DOJ) filed a lawsuit Tuesday against Google, alleging that the tech titan’s dominance in digital advertising was the result of anti-competitive practices.
Eight states — Virginia, California, Colorado, Connecticut, New Jersey, New York, Rhode Island, and Tennessee — joined the DOJ in the lawsuit, alleging that Google utilized a “simple but effective” plan to successfully establish “durable, industry-wide dominance.”
First, Google would buy out “actual or potential” competitors.
Secondly, it would simultaneously use its position of dominance to disrupt competitors and ensure that publishers and advertisers used Google products, the complaint alleges.
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Google is beset with “pervasive conflicts of interest,” the complaint further alleges. Google owns the technology to offer advertisement space, tools to make better ads, and an ad exchange to match publishers with advertisers, and the combination of these powers enables Google to inflate the barrier to entry in digital advertising to “artificially high levels.”
One unnamed Google advertising executive reportedly asked if there was a “deeper issue with us owning the platform, the exchange, and a huge network?” according to the complaint. “The analogy would be if Goldman or Citibank owned the [New York Stock Exchange].”
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The move comes just days after Google cut 12,000 employees as a cost-saving measure in anticipation of a difficult economic year. Like other Big Tech firms, ad revenue fell for Google in 2022, leading its video-sharing and streaming platform YouTube to post its first decline in revenue in the third quarter of last year since Google began publicly tracking the stat in 2020.