Why did the US government and a group of states sue Google?

The US Department of Justice, in conjunction with eight other states, filed an anti-trust lawsuit against Google. This is the DOJ’s second legal challenge to the tech behemoth’s market dominance and the fifth brought against it in the US since 2020.

The latest filing by the DOJ alleges that the tech giant “has used anticompetitive, exclusionary, and unlawful conduct to eliminate or severely diminish any threat to its dominance over digital advertising technologies.” The Department is seeking “equitable relief on behalf of the American public” in addition to “treble damages for losses” suffered by government agencies including the military which it claims overpaid for advertising displayed on the internet.

What does DOJ and the group of states accuse Google of doing?

“Over the past 15 years, Google has engaged in a course of anticompetitive and exclusionary conduct that consisted of neutralizing or eliminating ad tech competitors,” the Department of Justice said in a press release. Google is accused of using acquisitions to allow it to wield its “dominance across digital advertising markets” resulting in publishers and advertisers being forced to use its products. While at the same time “thwarting the ability to use competing products.”

“Whenever Google’s customers and competitors responded with innovation that threatened Google’s stranglehold over any one of these ad tech tools, Google’s anticompetitive response has been swift and effective,” accuses the complaint.

This monopolization of key digital advertising technologies, which are referred to as “ad tech stack” collectively, has allowed Google to distort and manipulate the buying and selling of advertising space.

Through its “distorting auction competition,” the tech giant has managed to limit real-time bidding on publisher inventory to its ad exchange while simultaneously impeding rivals ability to compete on the same terms the DOJ claims. Google is also accused of insulating itself from competition by manipulating auction mechanics across several of its products.

This “illegal monopoly” has resulted in Google pocketing over 30 percent of the advertising dollars on average that flow through its digital advertising technology products. In the case of certain transactions, it takes even more according to the DOJ statement.

This hoovering up of profits is denying ad revenue that “supports the creation and maintenance of a vibrant open web.” Through inflating costs for those wishing to advertise their product or business and reducing revenues for news publishers and content creators the DOJ says that Google has caused “great harm” to them and American consumers.

Google says DOJ’s lawsuit is “unfounded” and “flawed”

Google doesn’t see it that way and considers the advertising technology sector “highly competitive” and says that the lawsuit “attempts to pick winners and losers.” A spokesperson for the tech behemoth told ABC News that the lawsuit “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,” added the spokesperson.