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Google has been sued by the U.S. Justice Department (DOJ) for exploiting its market dominance in online advertising.

Tuesday, 24 January 2023, a lawsuit was filed by the DOJ along with eight states: Virginia, California, Colorado, Connecticut, New Jersey, New York, Rhode Island, and Tennessee.

Why Is Google in the Wrong?

The American firm is accused of buying other organizations to knock out competition in the online ad market. This way, advertisers and publishers are forced to use Google services, and the tech giant gains control over the advertisement services on the online market.

But competition in the ad tech space is broken, for reasons that were neither accidental nor inevitable. One industry behemoth, Google, has corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising. Having inserted itself into all aspects of the digital advertising marketplace, Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies.

Source

This was the strategy used by the company to gain control over the tools used by the majority of ad space sellers, the ones used for buying ad space, as well as over the most prominent ad exchange that facilitates the communication between sellers and buyers.

The current situation leads to big disadvantages for the competition and helps Google to attract more business for its own online ad products, practicing what has been described as “inflated fees”.

Google Position

The goal of this legal action is to break its monopoly over online advertising. This can be done by the dissolution of the Google Ad Manager suite (including Google’s publisher ad server and Google’s ad exchange).

The tech company rejects these accusations as unfounded and a barrier to development and progress.

Today’s lawsuit from the DOJ attempts to pick winners and losers in the highly competitive advertising technology sector. 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.

Google, via BleepingComputer

This is not the first complaint directed at the American multinational: in 2020 DOJ accused Google of breaking antitrust laws, in 2018 the company paid a €4.34 billion fine for leveraging the Android OS to enhance its search engine’s dominance in the mobile ad market, and in 2017 it was penalized for tweaking search results with a $2.72 billion fine.

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