US sues tech giant Google for monopoly

First modification: 01/24/2023 – 20:50Last modification: 01/24/2023 – 22:52

“Google used anti-competitive, exclusionary and illegal means to eliminate or seriously diminish any threat to its dominance over digital advertising technologies,” the lawsuit states.

The department and eight states, including California and New York, are asking the courts to convict the Californian company of violating competition law, make it pay damages and order it to sell its activities related to the sale of advertising space in line.

The lawsuit accuses Google of illegally maintaining a monopoly that has “corrupted legitimate competition in the ad technology industry.” “The damages are clear: Web site publishers earn less and advertisers spend more,” he says.

“Although Google has faced increased competition in recent years, its market share remains unmatched,” says Evelyn Mitchell, an analyst at Insider Intelligence.

According to her, the group rakes in more than a quarter of all digital ad spending and more than half of ad revenue supported by online searches.

Google’s ad transactions generated more than $200 billion in sales in 2021 and is parent company Alphabet’s biggest earner by a wide margin.

“Open Internet”

Google has vehemently denied being a monopoly, saying rivals in the online advertising market include Amazon, Meta (which owns Facebook, Instagram and WhatsApp), and Microsoft.

The Department of Justice (DoJ) is trying to identify “winners and losers” in the digital advertising industry, which is “already very competitive,” a Google spokesperson reacted in an email.

The lawsuit “double down on a flawed argument that would slow innovation, increase advertising fees and make it difficult for thousands of small businesses and publishers to grow,” it added.

According to the Computer and Communications Industry Association (CCIA), which represents the industry, the DoJ must take into account the entire advertising market, not just the digital part.

“The government’s claim that digital ads do not compete with advertising in print, radio, television and street signs defies reason,” he said.

But for the DoJ and the eight states, it is the internet that is at stake. “An open and vibrant internet is essential to American life,” the lawsuit states.

The plaintiffs argue that digital ads are necessary to fund websites, and that they are “bought and sold in large volumes in fractions of a second,” in a very different way than how print newspapers or television networks operate.

They claim that Google has abused its dominant position to exclude its rivals, in particular by “systematically seizing control of a wide variety of high-tech tools used by publishers, advertisers and other market participants”.

“Google should be worried”

“In its pursuit of inordinate profits, Google has done great disservice to online publishers, advertisers, and American consumers,” Deputy US Attorney General Lisa Monaco said in a statement.

This is the second lawsuit launched by the DoJ against the Californian group since the inauguration of President Joe Biden two years ago.

The first, which relates to its search engine domain, is due to go to trial this year.

Google has already been fined in the past for violating competition law, in particular by the European Union.

In the United States, the company is facing lawsuits launched in late 2020 by a coalition of states led by Texas. According to their allegations, Google sought to eliminate competition by manipulating sales in ad auctions.

“Google should be concerned,” says analyst Mitchell. The company “could be forced to sell part of its advertising business.”

Biden recently called on Republican and Democratic lawmakers to agree on rules to better regulate the practices of tech giants.

with AFP