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A new antitrust suit against Google threatens its advertising empire
Here’s what the Justice Department’s new antitrust suit against Google could mean for the rest of Big Tech.
The Justice Department announced Tuesday it has filed the second antitrust suit against Google in just over two years as government officials continue to take an aggressive stance against Big Tech companies.
In the latest lawsuit, which has been expected for some time, the Biden administration alleges Google abuses its dominance in the digital advertising space to shut out competition. The claim says Google has engaged in a “systematic campaign” to control all the tools used to buy and sell digital advertising.
“Having inserted itself into all aspects of the digital advertising marketplace, Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” the lawsuit says.
This is the first legal action the current White House has taken against a tech giant. And it raises a lot of questions about the ramifications and future action.
WHY IS THE GOVERNMENT SUING GOOGLE AND WHAT IS IT HOPING TO ACHIEVE?
The DOJ (along with attorneys general in eight states: California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia) alleges Google has used its grip on the online ad market to discourage and harm its rivals. That creates an illegal monopoly, it says.
“Competition in the ad tech space is broken, for reasons that were neither accidental nor inevitable,” the filing reads. “One industry behemoth, Google, has corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising.”
HOW MANY ANTITRUST SUITS IS GOOGLE FACING BEYOND THIS ONE?
Google has its share of pending legal issues. In 2020, the Justice Department targeted the company’s dominance in the online search market, including its deal to be the default search engine for Apple’s Safari. It also faces three other antitrust lawsuits from large groups of state attorneys general, including one out of Texas that focuses on its advertising business.
And more trouble could be brewing internationally, as the European Union’s antitrust enforcer has been investigating the company since 2021, with a focus on its ad business as well.
WHAT DOES THIS ANTITRUST SUIT MEAN FOR ADVERTISERS AND PUBLISHERS?
If you’re a company that’s placing ads, the DOJ contends, you’re having to pay more because there are no other options. If you’re a site that runs those ads, you’re earning less, officials say.
That has ripple effects. Ad-driven services are being forced to increase subscription fees and/or construct paywalls, since revenues from digital advertising aren’t enough to support the business.
Should the DOJ succeed in breaking up Google’s ad business, it could possibly help stem the tide of price hikes and paywalls. What impact that might have on Google services and products, though, is still unknown.
COULD THIS SUIT IMPACT OTHER ANTITRUST SUITS AGAINST BIG TECH COMPANIES?
Maybe not directly, but the Justice Department’s willingness to go after Google is likely a warning shot to other Big Tech firms under investigation, including Apple, Meta and Microsoft, especially when paired with Biden’s comments in a Wall Street Journal opinion piece earlier this month that read: “To make sure American tech keeps leading the world in cutting-edge innovation, we need fairer rules of the road. The next generation of great American companies shouldn’t be smothered by the dominant incumbents before they have a chance to get off the ground.”
HOW LONG WILL THIS TAKE?
Don’t expect things to be resolved quickly. The case filed in October 2020 has yet to go to trial (it’s expected to later this year). And the lawyers are certain to have plenty of things to say in the interim.
Google has the resources to delay things, which it’s likely to do, in hopes that a change in administrations could do away with some of the push behind Tuesday’s action. Barring a settlement, which seems unlikely, this case could be drawn out for quite some time.