Google 'Corrupted' Ad-Tech Competition, Feds Claim In New Lawsuit

In a sprawling antitrust complaint brought Tuesday, the Department of Justice alleges that Google used anticompetitive tactics to monopolize digital display advertising.

“Competition in the ad tech space is broken, for reasons that were neither accidental nor inevitable,” the federal government and eight states allege in a 153-page complaint brought in U.S. District Court in Alexandria, Virginia.

“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,” the complaint alleges. “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 federal government and states are seeking a court order that would require Google to unwind its 2008 acquisition of DoubleClick and 2011 purchase of AdMeld.

Among other claims, the complaint alleges that Google monopolized the U.S. publisher ad-server market, monopolized the U.S. advertiser ad-network market, and monopolized (or attempted to monopolize) the U.S. ad-exchange market.

The lawsuit is the second antitrust action brought by the Department of Justice against Google. An earlier case, filed in 2020, alleges that the company monopolizes the market for search.

Google separately faces several other antitrust lawsuits, including one brought in New York by a Texas-led coalition of state attorneys general. That matter also focuses on Google's role in online display advertising.

U.S. District Court Judge Kevin Castel in New York, who presides over the Texas-led lawsuit, recently allowed the states to proceed with claims that Google attempted to monopolize markets connected to display ads, and that Google used its market power in the ad-exchange market to force publishers to use its ad server.

But Castel also dismissed that complaint's most explosive claim -- that Google collaborated with Facebook to undermine header bidding.

A Google spokesperson stated Tuesday that the new complaint “largely duplicates” the Texas matter.

The Justice Department “is doubling down on a flawed argument that would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow,” the spokesperson stated.

Google added in a blog post that the government's attempt to force it to unwind the DoubleClick and AdMeld acquisitions amounts to an attempt "to rewrite history at the expense of publishers, advertisers and internet users."

"Both of these acquisitions enabled us to invest heavily in developing new and innovative advertising technologies," Google wrote, adding that since the deals were completed, "competition in this sector has only increased."

In the complaint brought Tuesday, the federal government alleges that Google came to dominate the market for online display ads through a series of acquisitions, including its purchases of DoubleClick, Invite Media, and AdMeld.

“The DoubleClick, Invite Media, and AdMeld acquisitions helped Google achieve dominant positions at each level of the open web ad tech stack and set the stage for Google to control and manipulate the process by which publishers sell and advertisers buy open web display inventory,” the government alleges.

The Federal Trade Commission allowed Google to purchase DoubleClick, and the Department of Justice's antitrust division cleared Google's purchase of AdMeld.

In both instances, officials concluded that the deals were not likely to substantially lessen competition.

Some advocacy groups, including Public Citizen, Consumer Reports and Public Knowledge, cheered news of the lawsuit.

“Nowhere is Big Tech’s monopoly power more apparent than in Google’s domination of the digital advertising market,” Matt Kent, competition policy advocate for Public Citizen, stated. “One company cannot be permitted to control every layer of the market that, for better or worse, is the lifeblood of online commerce and our digital lives.”

But the tech-industry funded Chamber of Progress criticized the suit, noting that Google's share of the online advertising market has recently dropped, and that the company laid off 12,000 employees last week.

“As the tech sector and advertising industry shed jobs, the Biden Administration should be looking for ways to support these sectors rather than undermine what’s left,” Chamber of Progress CEO Adam Kovacevich stated.

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