US authorities launches new law suit on Google in attempt to break up digital ad business
The United States Department of Justice has filed a lawsuit for the second time against Alphabet, parent company of Google, seeking to break up its digital advertising business.
This marks a significantly more serious challenge for the US-based company, after it was first hit with an antitrust lawsuit in 2020.
The lawsuit was filed on Tuesday in the US, co-signed by eight states, alleging that Google abuses its role as one of the largest suppliers, auctioneers and brokers of ads across the internet, on websites and mobile applications.
It also alleges that the company has set out with a plan to “neutralise or eliminate” its rivals in the digital advertising market by forcing advertisers to use its products, through a range of acquisitions, amongst other tactics.
The authorities allege that Google’s plan to assert dominance has been to “neutralise or eliminate” rivals through acquisitions and to force advertisers to use its products by making it difficult to use competitors’ products.
Chris Brinkworth, managing partner of Civic Data, told Mumbrella that anything with the Department of Justice involved “has to be taken seriously”.
He said looking at the “sheer size” of Google, and the fact it has known this has been coming for “some time”, the share price has only taken a slight dip due to “mum and dad investors”, rather than those that “know exactly what’s been happening within the entire ecosystem”.
Brinkworth
“Just by looking at the investments Google have already made in all of these other activities, shows that they’ve already been taking this seriously, waiting for it to happen.”
Though Brinkworth said that in terms of breaking up the business, this could just mean taking one small part off.
“It doesn’t mean breaking up the entire stack,” he said. “There is so much. Google Cloud, the Google Analytics business, Google Search, there are so many aspects of the business, they’re not going to break every single on up, that would be totally unfair.”
In response to the suit, VP of Global Ads at Google, Dan Taylor said: “Today’s lawsuit from the Department of Justice attempts to pick winners and losers in the highly competitive advertising technology sector.
Google’s Dan Taylor: The government should not pick winners and losers in a competitive industry
“It largely duplicates an unfounded lawsuit by the Texas Attorney General, much of which was recently dismissed by a federal court.”
“The lawsuit tries to rewrite history at the expense of publishers, advertisers and internet users,” he said, in response to “demanding that we unwind two acquisitions that were reviewed by U.S. regulators 12 years ago (AdMeld) and 15 years ago (DoubleClick)”.
Taylor also added that the lawsuit would harm the broader sector, undoing years of innovation.
Brinkworth questioned how far the US would go to follow through on the suit, with the rise of companies like TikTok, Tencent, Alibaba and other foreign companies that are starting to own a lot more data on users, the dominance of those products, and the money that is going to those products.
“Do the US want to jeopardize what is kind of a US asset?”.
“I don’t think it would be a massive break up where it’s broken into tiny parts where Google is never the same again . If it happened, I just think it would be about breaking up assets which Google has already been focused on solving for, around the fact that they own multiple parts of the same ecosystem, as they’re acting as agent and principle at the same time.”
Last year, Google revealed proposed restrictions to the way it tracks users across apps on its Android system, following its privacy Sandbox.
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Calum Jaspan was news editor at Mumbrella, based in Melbourne. He was also the producer and host of the Mumbrellacast. He left Mumbrella in May 2023.
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