The US accuses Google of abusing its monopoly in the advertising technology

Since 2020, the United States has brought five antitrust lawsuits against Google in an effort to limit the influence that giant internet corporations have over online information and commerce. While authorities have implemented new regulations to curb the negative effects of social media and other activities like data gathering, companies like Amazon, Google, Apple, and others have been the target of antitrust investigations and accusations in Europe.

In 2020, a lawsuit was filed in the US against Meta, the parent corporation of Facebook and Instagram, on the grounds that it had wrongfully quashed potential competitors. Google has been under close scrutiny. The Justice Department and another group of states separately sued Google over allegations that it misused its dominance over internet search, and in 2020, a group of states led by Texas launched an antitrust complaint against it regarding advertising technology. Some states also filed lawsuits in 2021 regarding Google’s app store policies.

Former FTC chairman William Kovacic stated that the latest action “adds another significant complexity to Google’s efforts to deal with authorities globally.” There’s a possibility that one or more of these obstacles may pass and impact the

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The lawsuit “attempts to choose winners and losers in the highly competitive advertising technology market,” according to Peter Schottenfels, a Google spokesman. He said that the Justice Department’s most recent action had a defective basis that would hinder innovation and hurt publishers, echoing the “unfounded” complaint Texas filed in 2020.

An inquiry for comments was not immediately answered by the Justice Department.

The Biden administration is attempting to stifle the growth of some of the biggest corporations in America by employing novel legal doctrines. In a rare instance, the F.T.C. has urged a judge to prevent Meta from acquiring a start-up in virtual reality, arguing that such a purchase may hurt prospective competition in a young field. The government also contested Microsoft’s $69 billion acquisition of video game producer Activision Blizzard, a noteworthy move given that the two businesses aren’t often viewed as direct rivals.

A scheme by Google to dominate advertising technology and then misuse that control, to the disadvantage of publishers, advertisers, and eventually consumers, is described in the complaint filed on Tuesday. According to the Justice Department and the states, including New York and California, Google established its monopoly by acquiring essential technologies that sent advertisements to publishers. As a result of Google taking its share, they claimed, marketers had to pay more for online real estate and publishers had to make do with less money.

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According to the complaint, “Google has utilized its market dominance in one or more of these ad tech products to smother the danger each time a threat has appeared.” “The outcome: Google’s strategy for long-term, all-encompassing supremacy has been successful.”

The latest complaint parallels arguments made in the 2020 case against Google’s advertising technology that Texas and 14 other states and territories supported. The court’s response to the lawsuit has been conflicted. A federal judge in New York decided in September that portions of the lawsuit could proceed, but she rejected a claim concerning a Google and Facebook agreement that the states said was anticompetitive.

Although Google’s ad tech section has helped the firm solidify its position as a one-stop shop for advertisers, its search engine has long been the company’s main source of revenue. Together, the two companies have given Google a significant edge when determining the cost of internet advertisements. Given how tightly interconnected Google’s numerous ad technologies and platforms are, a forced divestment may be a challenging and unpleasant process for the business.

In the midst of a decline in the online advertising business, Alphabet, Google’s parent company, is due to release financial results for the fourth quarter on February 2.

Google has continuously improved its internet advertising technologies. An 2007 acquisition of DoubleClick, a provider of advertising solutions, for $3.1 billion expanded the capabilities of its already potent digital advertising apparatus. Through the creation of a marketplace for publishers and the ability to display more advertising on websites all across the internet, DoubleClick gives Google a significant position on the internet.

At the time, Google’s search engine division generated $16.6 billion in yearly sales. After the company’s primary search engine, the division of advertising technologies earned $31.7 billion in sales by 2021, making it the second-largest business unit. The division’s revenues during the first three quarters of 2022 were $24.3 billion.

Online publishers have long accused Google of unjustly undercutting the earnings of the websites where the advertisements are placed due to its dominance over the digital ad ecosystem.

One publisher advocacy organization, which includes The New York Times Company, has asked Congress to permit the websites to bargain collectively for the terms of ad sales with Google and other internet platforms. Normally, antitrust rules would make such type of collaboration unlawful. The publishers’ efforts have thus far proven ineffective.

The Justice Department claimed that in addition to hurting publishers and advertisers, Google’s stranglehold on the ad tech industry also harmed internet users, stating that publishers had less funding to provide content for website visitors.

In reaction to a downturn in the digital ad industry, Google stated on Friday that it will fire 12,000 people, or 6% of its workforce. The business claimed that by making the adjustments, it will be able to give greater priority to initiatives incorporating artificial intelligence, which has recently gained popularity in Silicon Valley. about more

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