The US Department of Justice has accused Google of suppressing rival advertising platforms by the US Justice Department. The lawsuit filed in federal court on Tuesday could lead to the break-up of the Silicon Valley giant's ad branch, which generated $209.49 billion in 2021. The allegations come from eight states. In a statement, Google said it would defend itself against the allegations and called them a "flawed argument". The DoJ alleges that Google has illegally maintained a monopoly over ad placement tools and technology since at least January 2000. It says this hurts advertisers relying on those types of services or software because they have no choice but to use Google's offerings.
The US Justice Department has accused Google of using anticompetitive practices to preserve its place as the leading advertising engine. The tech giant controls around two-thirds of global online searches worth around $181bn annually. It is accused of harming competition by using its dominance to give its own ad services greater prominence than rivals. Attorney General Merrick Garland said: "Google's conduct has caused harm to consumers and innovation."
The lawsuit filed in federal court on Tuesday could lead to a break-up of the Silicon Valley giant's advertising branch.
Jonathan Kanter, the assistant attorney general of the Justice Department's antitrust division, said Google's actions over 15 years had "the effect of driving out rivals who could not afford to pay."Google has denied wrongdoing and said it would fight the lawsuit.
In a statement, Google said the allegations are without merit
According to a spokesperson, the company is confident that the allegations are without merit and has a strong record of innovation and competition. "It largely duplicates an unfounded lawsuit by the Texas Attorney General, much of which was recently dismissed by a federal court.
"DOJ 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."
Eight states have joined the suit
The eight states are California, Connecticut, Colorado, New York, New Jersey, Rhode Island and Tennessee. The states allege that Google has used its dominance to stifle competition and hurt consumers by using its power to promote its products or services ahead of competitors. They're seeking a court order preventing Google from continuing the alleged anticompetitive practices.
The Justice Department alleges that Google has maintained a monopoly over ad placement tools and technology and ad exchange platforms that match advertisers and publishers. It also claims that this dominance has been used to harm competitors. The lawsuit is seeking an end to these practices, along with unspecified damages for harm suffered by consumers who were allegedly hurt because of the company's actions.
Google may be forced to work with more third-party resellers
If Google is forced to increase collaboration with third-party resellers, it could mean that advertisers can get their ads on competing platforms. Antitrust laws prohibit firms from engaging in certain business practices like price-fixing agreements between competitors or predatory pricing tactics where firms charge below cost solely to drive out competitors from the market (like Amazon did when it started offering free shipping).