Google sued in the United States for monopoly in digital advertising

Google sued in the United States for monopoly in digital advertising

To end monopolies that hurt website publishers, businesses and consumers, a coalition of states and the US Department of Justice have filed a lawsuit against Google over monopolies in digital advertising.

Statement from New York Attorney General Letitia James

NEW YORK, Tuesday, January 24, 2023 (( – New York Attorney General Letitia James filed a lawsuit on Tuesday against Google LLC (Google), for monopolizing the digital advertising industry. Working with the United States Department of Justice (DOJ), a bipartisan eight-state coalition alleges that Google has engaged in a 15-year-old campaign to gain outsized influence at all levels of the internet industry. advertising technology, and has used its power to reduce competition and innovation, thereby harming website publishers, advertisers and consumers. Through this lawsuit, Attorney General James, the DOJ, and the coalition of states seek to put an end to Google’s anti-competitive practices and order it to sell various ad tech tools in order to restore the competitive balance in the field of digital advertising and to put an end to Google’s unfair advantage in this sector.

“New York’s consumers and small businesses are paying the price for Google’s stock,” Attorney General James said. “When website publishers receive less advertising revenue due to Google monopolies, they either have to reduce the quality of their website or pass the costs on to consumers. I am proud to join with the Department of Justice and other Attorneys General to fight Google’s illegal actions. I will not allow corporations, no matter how small or powerful, to take advantage of New York consumers or small businesses.”

Although Google is best known for its search engine, it has expanded its products into online advertising technologies that allow website publishers to sell their available space on digital ad exchanges. Google has used its market power to dictate the terms under which publishers and advertisers can do business, prioritizing its own financial gains over the quality of its products and the interests of its customers. The ads in question are called “display ads”, i.e. banners and sidebars that appear at the top and on the margins of websites. Google has built monopolies in three ad-tech markets and is able to control nearly every aspect of those sales, extracting higher fees than the competition at multiple stages of the transactions it processes.

By monopolizing the components of ad tech, Google has increased advertising costs for businesses while reducing the revenue website publishers receive for their ad space, keeping unfairly high fees to itself. This behavior hurts consumers because if publishers make less money on ad inventory, fewer of them are able to offer viewers content that is free, without subscriptions, paywalls, or other forms of monetization. The components of the ad tech market, and Google’s actions to monopolize each of them, include:

The Ad Server Publisher Marketplace: Website publishers – content creators or owners – use a tool called “publisher ad server” to manage the process of selecting ads to fill available ad slots when a user opens a web page. The tool quickly evaluates potential ads from different sources and applies a set of rules to decide which ad will be displayed, taking into account data about the user viewing the page and offers from ad exchanges. Publishers cannot reasonably integrate with more than one such tool, and switching tools is cost and resource prohibitive. Since 2008, Google has owned the industry’s leading publisher ad server, Google Ad Manager (aka DoubleClick for Publishers, or DFP). Google limits publishers’ power to transact with competing exchanges on terms they prefer.

Ad Exchange Marketplace: An ad exchange marketplace is a software platform that receives requests to fill advertising space on publishers’ web pages and solicits bids for each impression from advertiser buying tools such as ad networks. It chooses the winning bid and transmits this information to the publisher’s ad server. Google owns the industry’s leading ad exchange called AdX, which is now part of Google Ad Manager. Google provides beneficial bidding techniques exclusively to AdX, and limits real-time access to AdX to DFP, which is part of Google Ad Manager.

The ad network marketplace for advertisers: Advertisers receive and respond to bid requests from ad exchanges using advertiser buying tools, which include ad networks. These tools help advertisers connect to ad marketplaces, select impressions to bid on, submit bids, and track campaign goals. Ad networks are tools typically used by small advertisers, or advertisers who must rely on network targeting data for effective ad buying. The ad network is a “black box” for advertisers, who have little or no control or visibility into the process of buying impressions. Google offers the industry’s leading ad network, Google Ads, and only makes its application available through AdX.

Through this lawsuit, Attorney General James, the DOJ, and the coalition of states seek to restore a competitive and innovative marketplace and benefit consumers by asking the court to require Google to sell certain key ad technology assets. that it has accumulated through its monopolization efforts. The coalition is also asking the court to reverse any unfair advantage Google has gained through its anti-competitive behavior.

The attorneys general of California, Colorado, Connecticut, New Jersey, Rhode Island, Tennessee and Virginia join Attorney General James and the DOJ in the lawsuit filed today.

This case is being handled by Assistant Attorney General Morgan J. Feder of the Antitrust Bureau and Antitrust Bureau Chief Elinor Hoffmann. The Antitrust Bureau is part of the Division of Economic Justice, which is overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy.