US Department takes action against Google dominance in online advertising

Merrick Garland

The US Attorney General announced the lawsuit against Google.

(Photo: AP)

Washington The US government has sued the internet company Google for anti-competitive behavior. Google’s dominance of digital advertising is hurting customers and advertisers, Attorney General Merrick Garland said on Tuesday. The company uses its position of power to buy out rivals and force advertisers to use Google products by making it difficult to access competing offers. As a result, website creators earned less and advertisers paid more.

Eight other US states have joined the lawsuit filed in Virginia. As an example of Google’s approach, the Ministry of Justice referred to the purchase of the advertising service provider Doubleclick in 2008. Google then introduced a technology that involved a very fast bidding process for advertising on websites.

Google has been on an anti-competitive course for 15 years, Garland said. The company has hampered the rise of competing technology, manipulated the auctioning of online advertising, and thus greatly weakened, if not destroyed, competition in the industry.

The plaintiffs demand that Google separate its advertising business – namely the programs ad manager and ad exchange – and also change all structures that impede competition.

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Google parent Alphabet said the lawsuit merely repeated false arguments. Their success would cripple invention, raise advertising prices, and hamper the growth of thousands of small businesses.

Pressure from Washington against Big Tech is growing

For Google, this is the second lawsuit brought by the Department of Justice in just over two years. It shows that the pressure on Big Tech continues to grow under the Biden government. In October 2020, the ministry had already sued Google for violating antitrust law during the Trump administration. At that time it was about the abuse of dominance in the search engine market.

Google is not alone in its lawsuit. Washington is also currently taking a closer look at other large tech companies: The competition regulator FTC is currently running two lawsuits against Facebook’s parent company Meta and one against Microsoft.

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It is not yet possible to say whether the new lawsuit against Google will also lead to a split of the group. Unlike in Europe, a company cannot be broken up by law in the USA. Only the Justice Department can sue and then have to convince a court that there is monopoly and wrongdoing. The court then decides what punishment is appropriate.

The problem with these legal processes: a process up to the last instance can take years, which in the constantly changing world of technology is often half an eternity. Even with the first lawsuit against Google from 2020, the process is not scheduled to begin until this September – almost three years later.

Demergers are difficult in the US

The splitting up of corporations has worked in the past in the USA: Standard Oil, the Rockefellers’ oil company, which kept competitors out of the market with unsightly methods and was thus able to demand monopoly prices, had to split up. The telecommunications monopoly AT&T was also split up.

But even at Microsoft, advocates of the breakup have bitten their teeth. An appeals court overturned the decreed spin-off of certain business areas. Instead, the Justice Department agreed with Microsoft to open up browsers and other software.

With agency material from AP.

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