.On Tuesday, the U.S. Justice Department brought a second antitrust case against Google.
Within two years, there has been evidence that the US government will not give up on its antitrust suits against tech companies even though its court record has been mixed.
Tuesday afternoon saw Google stocks decrease by 1.3%.
advertising practices, is a big concern for the company.Google is very concerned about this legal action that centers around their advertising strategies.
The Biden administration’s Department of Justice has filed its first lawsuit against Google, which seeks to make the company divest part of its online advertising business. This follows a similar suit from the Department of Justice under the Trump administration in October 2020, which argued that Google has unlawfully used its monopoly power to eliminate competitors in internet search by making exclusionary agreements. This case is set to go to court in September.
Google earned a total of $54.5 billion in Q3 2020 from Search, YouTube, Google Network ads and other advertising sources.
Google is also facing three different antitrust lawsuits from state attorneys general, including one led by Texas Attorney General Ken Paxton that focuses on its advertising services.
The U.S. Department of Justice has filed a suit that includes the states of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia.
X and Facebook.Google has been under fire for its involvement in the online advertising market, with critics accusing it of having a monopoly due to leveraging its many roles, including buying, selling and running an ad exchange. Nevertheless, the company insists MetaX and Facebook along with other competitors still have a large share of the market.
In their legal action, the Justice Department and the states are claiming that Google attempted to dominate all aspects of the market, knowing that it could become “the ultimate destination for all advertisements.”
It is alleged that Google will no longer have to rely on its merits and instead can simply create rules that disqualify its competitors.
One of Google’s own advertising executives expressed their doubt over the company’s extensive dominance in this field, as stated in the complaint.
The executive reportedly inquired, “Are there any more serious problems arising from us owning the platform, the market, and a massive network? It would be like Goldman Sachs or Citibank owning the New York Stock Exchange.”
Critics of Google’s practices argue that website creators will not be able to earn as much and advertisers will have to pay more than they would if there were more competition in the market, which could drive down prices and create opportunities for new, better technologies that would make transactions cheaper and improve the overall quality.
Consequently, publishers are turning to options such as subscription models to finance their operations.
Google’s strategy, as stated in the complaint, included buying other companies to increase its influence in the advertising market and ostensibly pave the way for it to block competition across the advertisement technology industry. These acquisitions involved DoubleClick, an ad server of a publisher, which was purchased in 2008 by Google. In addition, a small ad exchange was also acquired by Google and rebranded as AdX. This has enabled Google to mandate publishers to solely use its services in order to access any one of them – rather than collaborating with other similar tools within the online advertisement transaction system.
The enforcers accuse Google of “stealing from advertisers to give to publishers,” and setting overly elevated prices for ads on its own platforms. Other publishers’ ad servers couldn’t keep up with Google’s cost charges, especially without access to the demand from Google Ads, cutting their companies out of potential revenues.
The complaint alleges that Google took steps to maintain its dominance in the market by recognizing potential threats, such as when publishers were able to use yield management tools to get better prices for their inventory on other platforms, rather than relying on Google.
The complainants argue that Google employed a “familiar tactic” after the acquisition of AdMeld in 2011, by changing its AdX contracts to keep publishers from using other platforms and thus forcing its own exchange on them.
Google reportedly viewed the implementation of “header bidding,” which enables other ad exchanges to make bids for inventory before Google’s preferences are enabled, as an “existential threat” to their business.
The FTC filing calls Google’s “Open Bidding” tool a “Trojan Horse,” alleging that by encouraging publishers and ad exchanges to join the program, Google has a guaranteed seat in every auction and is thus capable of controlling their competition regardless of what offers the best match between advertisers and publishers.
.Google was worried about competing with ads from Facebook and Amazon.
The Department of Justice and state attorneys general claim that, in exchange for spending and pricing commitments intended to direct more of Facebook’s captive advertiser spending to Google’s platforms, Google granted Facebook preferential Open Bidding auction terms. The complaint also mentions that Google attempted to make a similar arrangement with Amazon, but was unsuccessful.
In a statement, a Google spokesperson remarked that the Department of Justice’s lawsuit to decide who succeeds in the competitive advertising technology industry replicated an unsubstantiated lawsuit made by the Texas Attorney General, much of which has been denied by a federal court. They went on to explain that this flawed logic would hinder innovation, increase advertisement costs, and make it more difficult for small businesses and publishers to thrive.
and Oracle Corp.Jonathan Kanter, head of the US Department of Justice Antitrust Division, was said to be allowed to work on any matters concerning Google after the company requested permission for him to recuse himself from related cases due to him previously representing some of its rivals and critics, including Yelp and Oracle Corporation, as reported by The Wall Street Journal at the start of this month. Bloomberg had also reported earlier that Kanter would not conduct work relating to Google until the department had evaluated his reasons for recusal.
and News Corp
A spokesperson for Google declared in a statement last year that Kanter’s prior activities and declarations gave rise to doubts about his capability to be impartial.
Mask, a cryptocurrency wallet provider, is being sued.The Federal Trade Commission has sued MetaMask, a cryptocurrency wallet provider, in addition to Google facing scrutiny from the government on other matters.
Bing search engineBing, Microsoft’s search engine, is also the target of two antitrust lawsuits.
by Electronic ArtsThe potential merger of Electronic Arts and Activision.
Google, along with other tech companies, has faced increased criticism from foreign entities, especially in Europe. Here, Google has also dealt with various competition proceedings and fresh restrictions that could significantly impact technological business plans.
Alphabet, the parent company to Google, is set to release earnings on Feb. 2.