The US Department of Justice filed a complaint against Google on Tuesday, January 24, 2023 for “monopoly” in the online advertising market, according to a court filing.
“Google used anticompetitive and illegal methods to eliminate or reduce drastically, any threat to its dominance over the technologies used for digital advertising”asserts authority.
Eight US states file a complaint
The ministry and eight US states, including California and New York, are asking the courts to convict the Californian group of violating competition laws, to make it pay damages and to order the sale of its activities related to the sale of online advertising space.
The complaint explains that Google controls both of the technologies used by “almost all websites” to sell banners or pop-ups to brands, the tools advertisers use to buy those spaces, and the marketplace where the transactions take place.
“The damage is clear: website publishers earn less and advertisers spend more”claim the plaintiffs.
“Although Google has dealt with increased competition in recent years, its market share is still unmatched”notes Insider Intelligence analyst Evelyn Mitchell.
According to her, the group collects more than a quarter of all digital ad spend and more than half of ad revenue backed by online searches.
Fierce competition online and offline
The Ministry “trying to pick winners and losers” in the digital advertising sector, which is “already very competitive”a Google spokesperson replied.
The company says it believes that if the ministry is successful, its approach will “would slow innovation, increase advertising costs and make it harder for thousands of small businesses and publishers to grow”.
“Competition for advertising revenue is fierce online and offline”, supports the CCIA (Computer & Communications Industry Association) in a press release. This professional association, which represents the industry, believes that the ministry should take into account the entire advertising market, not just the digital part.
“The government’s position that online pubs do not compete with print, radio, TV and street signs defies reason”launches CCIA.
“An Open Internet”
But for the ministry and the eight states, it is indeed the internet that is at stake. “An Open Internet” is “indispensable to American life”it is stated in the complaint in the introduction.
The plaintiffs argue that digital ads are necessary to fund websites, and they are “bought and sold in large quantities in fractions of a second”according to a function that is very different from the printed newspapers or the management of television channels.
“More than 13 billion ads are sold every day” on the web in the United States, the complaints add. They claim that Google abused its dominant position to exclude its competitors, particularly by “systematically taking control of a wide range of high-tech tools used by publishers, advertisers and other market participants”.
– “Worry” –
“We accuse Google of capturing publishers’ revenue for their own profit and punishing those who sought alternatives”Deputy Minister Vanita Gupta was quoted as saying in a statement. “These practices have weakened the free and open Internet and increased costs for businesses and the United States government, including the military”she insisted.
This is the second complaint launched by the department against the Californian group since the inauguration of President Joe Biden two years ago. The first, relating to the dominance of its search engine, should lead to a lawsuit this year.
Google has already been fined in the past for breaching competition law, notably by the EU.
