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Google Faces Fresh Antitrust Lawsuit from Department of Justice and Eight States



The speedy rise of AI-powered chatbot ChatGPT has been dubbed the biggest challenge to Google’s search business in recent memory. But it’s far from the only significant threat the search giant is facing.


On January 24, the Justice Department and a group of eight states filed an antitrust lawsuit, accusing Google of abusing a monopoly in the advertising technology industry. In the suit, the DOJ alleges that Google “has corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swatch of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising.”


“Having inserted itself into all aspects of the digital advertising marketplace,” the suit continues, “Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies.”


What the Google Antitrust Suit Alleges

While the lawsuit adds up to over 150 pages, the DOJ’s argument is relatively simple. Businesses and digital marketers will be familiar with Google’s end-to-end coverage of key components of the digital ad stack. However, they may overlook just how much of that coverage is actually near-total control. According to the lawsuit, the DOJ estimates that:

  • Google controls about 90% of the publisher ad server market, thanks to its ownership of DoubleClick for Publishers (now part of the Google Ad Manager product)

  • Google has about 50% market share in digital ad exchanges with Google Ad Manager

  • Google also owns the leading tool for buying digital ad space (Display & Video 360), Google Ads for managing search ads, as well as media platforms like YouTube


The result of their alleged abuses? According to the DOJ, website creators wind up earning less and advertisers pay more than they would in a more competitive market. In turn, publishers are unable to offer as much content without resorting to monetization models like subscriptions and paywalls.


How Google is Responding

After the announcement of the DOJ suit, Google responded with a statement of its own. In the statement, Dan Taylor, Vice President of Global Ads, accused the government of “attempting to rewrite history at the expense of publishers, advertisers and internet users” by potentially unwinding its past acquisitions of AdMeld and DoubleClick. It also described the government as effectively picking winners and losers in an industry that is increasingly competitive, citing recent acquisitions and growth from Microsoft, Amazon, Apple, and others. (Google’s market share of ad spending is now about 28.6%, down from a 2017 peak of 34.7%.)


Google released an additional document responding to specific claims in the DOJ suit.


What's Next for the Lawsuit?

This lawsuit, as well as the other suits brought against Google, are expected to meet resistance in federal courts, according to the New York Times. However, as one analyst, former FTC chair William Kovacic, puts it, the multiplying regulatory challenges to Google’s business increase the likelihood of success: “There’s a chance one or more of these challenges is going to make its way through and hit the target.”


Precision's Thoughts

It may be a few years before any final verdict is reached in this case and others against Google. In the meantime, however, the suits are not the only action to keep an eye on.


With regulators and legislators on both sides of the aisle zeroing in on potential overreaches by Big Tech, some speculate that new antitrust laws may soon be on the way, regardless of whether or not the lawsuits are successful. Plus, with the AI arms race kicking off (and Google already making an early blunder with its release of the Bard AI tool), a massive shake-up in the world of digital marketing is beginning to look like a very safe bet.

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