The DOJ sues Google for ad dominance, wants to break company up

It’s been speculated for some time, but today the Department of Justice and eight states are suing Google for its alleged dominance of the online advertising market. The government takes issue with Google’s position on “ad tech,” a tool used to automatically match advertisers with website publishers. To solve the problem, the DOJ apparently told Google that it was considering splitting up the company.

“Today’s complaint alleges that Google used anticompetitive, exclusionary, and unlawful conduct to eliminate or substantially mitigate threats to its dominance of digital advertising technology.” Instead, the Department of Justice will vigorously enforce antitrust laws to protect consumers, protect competition, and ensure economic fairness and opportunity for all.”

The press release briefly describes the DOJ’s issues.

Google’s anti-competitive behavior includes:

• Acquisition of Competitors: Involved in a series of acquisitions to gain control of the major digital advertising tools used by website publishers to sell advertising space.
• Mandatory adoption of Google tools: Locking website publishers into their newly acquired tools by limiting their own essential advertiser demand to ad exchanges, using publisher ad servers to condition effective real-time access to ad exchanges increase.
• Distortion of auction competition: Restrict real-time bidding on publisher inventory to their own ad exchanges, impeding the ability of rival ad exchanges to compete on equal terms with Google’s ad exchanges.When
• Auction operation: Manipulate auction mechanics in several products to isolate Google from the competition, undermine competitors’ size, and prevent the rise of competing technologies.

Google is the largest digital advertising broker in the US, but not by much. Axios reports that Google accounts for his 28.8% of all digital ad spend in the US, while Meta accounts for his 19.6%. There are also many companies with a lot of growth potential such as Amazon, TikTok, Spotify and Apple, but for now they tend to focus only on specific platforms.

However, the DOJ’s concern is not the overall market share, but rather the market share of the individual tools used by publishers and advertisers. On the “selling side” (his website side that sells ad space like this one), DOJ said Google’s “DoubleClick for Publishers” ad server has more than 90% of his market share. I’m here. On the “buying side” (advertisers looking for ad spots), the Google ad network for small businesses has his 80% market share, while the “display & Video 360′ has his 40% market share. percent market share. Google Ad Exchange, which matches sellers and buyers, has a 50% market share.

As a solution, DOJ states: It was the first monopoly case in about half a century in which the Justice Department sought damages for violating civil antitrust laws. Basically, I want Google to give me my money back.

Google has published a blog post stating that it disagrees with the government’s latest antitrust lawsuit. After the usual torture that the market is more competitive than plaintiffs believe, a new threat not mentioned in the press release is added: “DOJ has been reviewed by U.S. regulators for 12 years2 It is demanding that two acquisitions be dissolved: 15 years ago (AdMeld) and 15 years ago (DoubleClick).DOJ has sacrificed publishers, advertisers, and Internet users to overthrow these two acquisitions. We are trying to rewrite history.”

It’s hard to believe that Google will be dismantled. We hear the threats fairly often, but the last time the government split the company up was him nearly 40 years ago. at that time, telephone company, Bell Systems split into what would eventually become AT&T, Verizon, and Lumen Technologies/CenturyLink/Qwest. Since then, the US government’s desire to regulate companies has declined significantly, and today threats are usually just the starting point for negotiations.

In the run-up to the lawsuit, Google told DOJ last year that it was willing to “split” its advertising business by moving one division from Google to parent company Alphabet. This is a move that almost seems unregistered when Google and Alphabet have the same CEO, CFO, stock ticker, and share the same (very big) pile of money.