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Google slapped with antitrust lawsuit in US for monopolising ad tech stack

Google slapped with antitrust lawsuit in US for monopolising ad tech stack
Photo Credit: Pixabay
25 Jan, 2023
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US Department of Justice (DOJ) has filed an antitrust lawsuit against Google for allegedly violating the Sherman antitrust act by monopolising the “ad tech stack” which is used by almost every major website publisher to sell ads and by advertisers to buy ad inventory to target customers.

The lawsuit claims that for 15 years, Google has been engaging in anti-competitive practices that include buying out rivals in the ad tech space and locking publishers and advertisers to its products. This has helped the big tech company cement its position as a supplier of ad tools used by websites and advertisers. 

Google also controls the largest ad exchange that runs real-time ad auctions for buyers and sellers in online advertising. DOJ has accused Google of restricting real-time bidding on publisher inventory to its ad exchange, affecting the ability of rival ad exchanges to compete with it. It also accused Google of manipulating auctions to promote its products and prevent rivals from growing. 

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DOJ said in a blog post on Tuesday that this lawsuit will restore competition in the digital ads market and ensure equitable and monetary relief. 

“We allege that Google has captured publishers’ revenue for its profits and punished publishers who sought out alternatives. Those actions have weakened the free and open internet and increased advertising costs for businesses and the United States government, including for our military,” said Vanita Gupta, Associate Attorney General at DOJ.

The lawsuit involves attorneys general from several US states including California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia. 

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DOJ further claims that these anti-competitive practices have allowed Google to take home more than 30% of the advertising money flowing through its ad tech platforms. 

Advertising accounts for over 80% of Google’s revenue. According to the company’s quarterly results for Q3 2022, Google advertising generated revenue of $54.48 billion out of the total revenue of $69 billion. 

Google’s dominant position in digital ads markets is under scrutiny in various jurisdictions. For instance, last January, India’s antitrust watchdog ordered a probe into an allegation by the Digital News Publishers Association that Google was denying a fair share of digital advertising revenue to news publishers. In March 2019, European Commission slapped a fine of €1.49 billion on Google for using its dominant position to prevent its rivals from placing search advertisements on websites that were using Google’s ad services.

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In 2020, DOJ also filed a lawsuit against Google for monopolising search and search advertising. The search advertising case against Google is different from the digital advertising technology lawsuit that was filed by the DOJ on Tuesday.

In another antitrust case in India over Google’s monopoly in the Android ecosystem, the firm was slapped by CCI with a fine of ₹1,338 core in India in October. Google appealed against the fine in the National Company Law Appellate Tribunal (NCLAT), which refused to stay the CCI ruling and asked it to pay a certain amount of the fine. Google later moved the Supreme Court of India to stay the order, but its appeal was rejected last week and the matter has been sent to NCLAT.