The Justice Department and eight states sued Google on Tuesday, alleging that its dominance in digital advertising harms competition as well as consumers and advertisers — including the U.S. government.
An internet services trade group that includes Google as a member described the lawsuit and its “radical structural remedies” as unjustified. Matt Schruers, president of the Computer & Communications Industry Association, said competition for advertising is fierce and the “governments’ contention that digital ads aren’t in competition with print, broadcast, and outdoor advertising defies reason.
”Dina Srinivasan, a Yale University fellow and adtech expert, said the lawsuit is “huge” because it aligns the entire nation — state and federal governments — in a bipartisan legal offensive against Google..” The fact that intermediaries are getting 30% to 50% of the take on each ad trade is “an insane inefficiency to have baked into the U.S. economy.” She called it “a massive tax on the free internet and consumers at large. It directly affects the viability of a free press” as well. As with many highly complex technical markets, it has taken time for federal and state regulators and policymakers to catch up with and understand the online ad market. Srinivasan noted that it took a decade before they woke up to the perils of high-speed trading in financial markets and began adopting measures to discourage it.Google held nearly 29% of the U.S. digital advertising market — which includes all the ads people see on computers. phones, tablets and other internet-connected devices — in 2022, according to research firm Insider Intelligence. Facebook parent company Meta is second, commanding nearly 20% of the market. Amazon is a distant, but growing, third at more than 11%. Insider is estimating that both Google and Meta’s share of the ad market will decline, while rivals such as Amazon and TikTok are expected to see gains. This is the latest legal action taken against Google by either the Justice Department or local state governments. In October 2020, for instance, the Trump administration and 11 state attorneys general sued Google for violating antitrust laws, alleging anticompetitive practices in the search and search advertising markets. Asked why the Justice Department would bring the suit when a similar complaint has already been filed by states, Assistant Attorney General Jonathan Kanter, the department’s top antitrust official, said, “We conducted our own investigation, and that investigation occurred over many years.” He said the Justice Department lawsuit, totaling roughly 150 pages, details “many facts, many episodes that individually and in the aggregate” reveal numerous monopolies. Tuesday’s lawsuit in essence aligns the Biden administration and new states with the 35 states and District of Colombia that sued Google in December 2020 over the exact same issues. The states taking part in the suit include California, Virginia, Connecticut, Colorado, New Jersey, New York, Rhode Island and Tennessee.AP Technology Writer Ortutay reported from San Francisco and Bajak from Boston. AP Technology Writer Matt O’Brien contributed.
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