• by Laurie Sullivan , Yesterday

PubMatic's lawsuit, filed Monday, is the second by an advertising exchange since a federal judge ruled in April that Google had illegally monopolized ad exchanges and tools used by websites to sell ad space.

The lawsuit against Google was filed in the U.S. District Court for the Eastern District of Virginia.

“Competition is the cornerstone of innovation — but when one company dominates unfairly, everyone else pays the price -- not just competitors, but the entire ecosystem of publishers, advertisers, and ultimately consumers who deserve better choices and experiences,” Rejeev Goel, co-founder and CEO of PubMatic, wrote in a blog post published Monday.

In the post, Goel explained that PubMatic’s legal action is not just intended to recoup damages, but rather to make meaningful change for the better to support digital advertising, which he believes has become more dependent on artificial intelligence (AI).

The step toward championing a fair, open internet will positively fuel the endless potential of content creators and sustain quality journalism, information, and entertainment through advertising, according to Goel.

The lawsuit details how Google’s actions allegedly impeded PubMatic’s ability to gain market share and revenue growth, among other reasons.

The company said Google “undermined PubMatic’s mission to help publishers maximize revenue and fairly compete in the digital advertising market,” and that Google’s “control of both the buy and sell-sides enabled it to dominate the ad exchange market, leverage data that others did not have access to, gain unfair bidding advantages, and secure priority inventory.”

OpenX Technologies filed the first suit against Google in August, alleging similar anticompetitive behavior and manipulation of ad auctions.

That suit claimed Google harmed its ad exchange and ultimately forced it to shut down its ad-server business in 2019 and change its business model.

The complaint -- which is very similar to OpenX's -- describes how "Google's dominance deprived publishers and advertisers of the benefits of fair competition."

It claims the dominance caused "real damage to consumers" in terms of "higher prices" as a result of higher advertising costs and a lack of transparency.

"Google’s illegal actions directly and measurably impacted PubMatic, impeding the company’s ability to reach its full potential in terms of market share and revenue growth and compete on a level playing field,” the company said. 

Goel wrote that when markets function properly, it creates “conditions for faster investment, bolder ideas, and better tools" for publishers and advertisers as well as consumers.

Innovation rewards merit, not dominance because it encourages risk-taking and innovation that drives progress, Goel wrote.

“A more level marketplace will empower independent companies like ours to take bigger bets and drive faster progress, ultimately benefitting our customers and consumers,” he wrote.