Feds and states file lawsuit against Google for monopolizing ad tech markets

It’s positive to see government agencies working to curb monopoly power.

The U.S. Department of Justice and eight states filed a lawsuit on Tuesday charging Google with operating an unfair monopoly scheme in markets for advertising technology.

The lawsuit alleges Google leverages control over advertising technologies that web display ads are bought and sold through, driving out competition and receiving profits that far exceed what could be realized in a competitive market. This scheme hurts advertisers, small businesses, website creators, and consumers, and deters innovation in the advertising technologies industry. 

“Nowhere is Big Tech’s monopoly power more apparent than in Google’s domination of the digital advertising market,” said Matt Kent, competition policy advocate for Public Citizen, a consumer advocacy group. “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.”

The Justice Department is continuing its strong trend under Assistant Attorney General Jonathan Kanter of taking on monopolists rather than negotiating with them, Kent said.

Every day in the United States, website publishers sell more than 40 billion digital advertisements, which generates over $36 billion in annual revenue.

Advertising technology automates the match between website publishers and advertisers. When an internet user opens a webpage with ad space to sell, advertising technology tools instantly match that website publisher with an advertiser looking to promote its products or services to that user.

The lawsuit alleges that Google has engaged in an anticompetitive scheme over the last two decades to obtain and maintain control over nearly all aspects of advertising technology. Then it used anti-competitive means to eliminate or diminish any threat to that control. That power allows Google to dictate how digital advertising is sold and the terms on which its rivals can compete.

So kudos to the department and eight stages – California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia – for attempting to tame the tiger. Competition in America is about price, selection, and service. It benefits consumers by keeping prices low and the quality and choice of goods and services high.