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DOJ sues Google, alleging monopoly on online ads

DOJ sues Google, alleging monopoly on online ads

The Justice Department and eight states filed a lawsuit against Google this week, alleging that the company has dominance over the online ad space.

The lawsuit is the second DOJ litigation aimed at Google, having filed a separate lawsuit against the company’s alleged monopoly over internet search traffic in 2020. Google has long held the top spot in digital advertising, accounting for nearly 30% of the industry last year.

“Google’s anticompetitive behavior has raised barriers to entry to artificially high levels, forced key competitors to abandon the market for ad tech tools, dissuaded potential competitors from joining the market, and left Google’s few remaining competitors marginalized and unfairly disadvantaged,” DOJ and the eight states already.

“The harm is clear: website creators earn less, and advertisers pay more, than they would in a market where unfettered competitive pressure could discipline prices and lead to more innovative ad tech tools that would ultimately result in higher quality and lower cost transactions for market participants,” the lawsuit continues.

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Google

Lettering with the logo of Google is stuck on a glass pane in the press center. (Rolf Vennenbernd/picture alliance via Getty Images/Getty Images)

Department of Justice

Department of Justice inscription is seen on athe headquarters’ building in Washington, DC, United States on October 20, 2022. (Beata Zawrzel/NurPhoto via Getty Images/Getty Images)

The plaintiffs are asking the US District Court for the Eastern District of Virginia to order the divestiture of the Google Ad Manager suite, including its publisher ad server DFP, and its ad exchange AdX.

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News of the lawsuit comes just days after Alphabet, Google’s parent company, announced plans to lay off 12,000 workers from its various teams.

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Digital advertising accounts for some 80% of Google’s revenue, and its dominance in the space has been shrinking in recent years. It accounted for 36.7% of digital advertising in 2016 but had fallen to 28.8% in 2022, according to Reuters.

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The DOJ’s other lawsuit against Google is scheduled to go to trial in September.

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Google pushed back on the DOJ lawsuit in a statement to Fox News Digital. The company also published a blog post responding to the lawsuit on Tuesday.

“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,” a Google spokesperson wrote, inserting their own hyperlinks.

The DOJ did not immediately respond to a request for comment.

Reuters contributed to this report.

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