Justice Department Sues Google For Alleged Digital Advertising Monopoly

Ben ZeisloftJanuary 24, 2023

The Biden administration’s Justice Department A number of state attorneys general filed suits against the defendants Google Tuesday, allegedly monopolizing various digital advertising technologies.

Google, the agency claimed, monopolizes tools that website publishers use in selling ads and that companies use to purchase advertising. This civil antitrust suit follows another. complaint issued by the Trump administration’s Justice Department three years ago related to the company’s alleged monopoly over search advertising, is backed by the attorneys general of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia.

“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,” Attorney General Merrick Grland stated in a press release. “The Justice Department will vigorously enforce our antitrust laws to protect consumers, safeguard competition, and ensure economic fairness and opportunity for all.”

Shares for Alphabet fell nearly 2% on Tuesday; the company’s stock price has declined 25% over the past year, exceeding 9% decreases in the S&P 500 and 18% decreases in the technology-heavy NASDAQ Composite.

According to the Justice Department Google is accused of engaging in a criminal activity. “pattern of acquisitions to obtain control over key digital advertising tools” And has manipulated advertising auctions. “deprive rivals of scale.” These moves could be in violation of the Sherman Act. “monopolization, attempted monopolization, or conspiracy or combination to monopolize” deemed unreasonable The court system.

“The complaint filed today alleges a pervasive and systemic pattern of misconduct through which Google sought to consolidate market power and stave off free-market competition,” The release was signed by Lisa Monaco, Deputy General Attorney General. “In pursuit of outsized profits, Google has caused great harm to online publishers and advertisers and American consumers.”

Google stated that the Justice Department lawsuit aims to “pick winners and losers” The “highly competitive” Advertising technology. “It largely duplicates an unfounded lawsuit by the Texas Attorney General, much of which was recently dismissed by a federal court,” A spokesperson claimed that the Justice Department is being represented by multiple media outlets. “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.”

According to Google, approximately 29% of total digital advertising revenue in America was generated by Google in 2021. data eMarketer. Meta and Amazon accounted for 24% and 11% respectively of advertising revenues.

Google parent company Alphabet announced major headcount reductions as the news of the antitrust suit comes as Google CEO Sundar Pichai informs staff members that approximately 12,000 positions would be eliminated. Sundar Pichai, Alphabet CEO, informed staff that approximately 12,000 positions would be eliminated. eliminated as a result of macroeconomic turmoil and the need to manage costs, affecting roughly 6% of the company’s workforce Nearly 187,000

The Children’s Investment Fund Management CEO Christopher Hohn called Alphabet plans to cut headcount by another 25,000. This is in response to the excessively high median salary exceeding $300,000. It also reflects rapid growth of payrolls. “I am encouraged to see that you are now taking some action to right size Alphabet’s cost base and understand that it is never an easy decision to let people go,” He told Pichai. “Ultimately management will need to go further.”