The Department of Justice and eight states in the United States (US) filed an antitrust lawsuit against Google on Tuesday (24/1). This lawsuit is related to Google's monopoly on the entire online advertising ecosystem which is detrimental to advertisers, consumers, and even the US government.
In its complaint, the US government alleges that Google seeks to "neutralize or eliminate" competition in the online advertising market through acquisitions and forcing advertisers to use its products by making it difficult to use products offered by competitors.
"Monopolies threaten the free and fair markets that underlie our economy. They stifle innovation, hurt producers and workers, and increase costs for consumers," Attorney General Merrick Garland said at a Tuesday news conference.
For 15 years, Garland continued, Google behaved in an "anti-competitive" way, stopping the emergence of competing technologies and manipulating online ad auction mechanisms to force advertisers and publishers to use their services and products.
"By doing so, Google engages in 'exclusive behavior' which has greatly weakened, destroying competition in the digital ad technology industry," he said.
The lawsuit accuses Google of unlawfully monopolizing the way online ads are displayed by excluding competitors. Google's ad manager allows large publishers who have significant direct sales to manage their ads. Meanwhile, ad exchanges are real 'time marketplaces' for buying and selling display ads online.
Garland said Google controls the technology used by most major website publishers to offer ad space for sale, as well as the largest ad exchange that brings publishers and advertisers together when ad space is sold. As a result, website builders earn less and advertisers have to pay more.
The suit, filed in federal court in Alexandria, Virginia, demands that Google divest from the business of controlling the technical tools that manage the buying, selling, and auctioning of digital display ads. The internet giant was asked to focus on search engines which are the core of its business, as well as other services including YouTube, Gmail and cloud services.
In response to this lawsuit, Alphabet Inc. which is Google's parent company, said the lawsuit presented was a flawed argument that would slow innovation, drive up advertising costs and make it harder for thousands of small businesses and publishers to grow.
Alphabet says digital advertising currently accounts for about 80% of Google's revenue, and generally supports other, less profitable endeavors.