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Monday, January 30, 2023

US sues Google over dominance of online ad market

World NewsUS sues Google over dominance of online ad market

The US Justice Department on Tuesday sued Google for dominating the online advertising market, setting off a new legal battle against the California-based tech giant.

The federal antitrust lawsuit accused Google of illegally maintaining a monopoly that “distorted legitimate competition in the ad tech industry.”

“Google has used anticompetitive, extrinsic, and illegal means to eliminate or significantly reduce the threat of its dominance over digital advertising technologies,” the suit added.

The case was initiated by the US Department of Justice (DOJ) in cooperation with eight states: California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia.

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At the heart of the issue is Google’s dominance of the ad tech business, the technology that companies rely on for their online advertising needs.

Prosecutors said Google is now “controlling” the key sector, meaning website builders earn less and advertisers pay more, all because of a lack of competitors to innovate.

“In pursuit of huge profits, Google has done great harm to online publishers and advertisers and American consumers,” Deputy US Attorney General Lisa Monaco said in a statement.

The federal lawsuit follows state lawsuits against Google alleging it illegally dominates the markets for online search, advertising technology and apps on the Android mobile platform.

Google has vehemently denied it is a monopoly, saying competitors in the online advertising market include Amazon, Facebook owner Meta and Microsoft.

“Today’s lawsuit by the DOJ seeks to pick winners and losers in the highly competitive ad technology sector,” a Google spokesperson said in an email.

The lawsuit “doubles down on a flawed argument that will slow innovation, drive up advertising fees, and make it harder for thousands of small businesses and publishers to grow,” Google added.

The Computer and Communications Industry Association, a major tech lobby, said the lawsuit failed to take into account offline competitors, including advertising in newspapers and on TV and radio.

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“The government’s assertion that digital advertising is not competitive with print, broadcast and outdoor advertising is unfounded,” CCIA said in a statement.

The US is home to global tech giants Google, Apple, Amazon and Meta and has relied heavily on the courts to curb their power.

Earlier this month, President Joe Biden urged Republican and Democratic lawmakers to break through years of political gridlock and pass legislation that would set tougher rules for Big Tech.

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