The Justice Department is suing Google to crack down on its advertising business

Along with eight states, the US Department of Justice is suing Google for cracking down on the company’s advertising business. In a complaint filed Tuesday in federal court in Virginia, the agency accused Google of illegally monopolizing the digital advertising market. “Google’s anti-competitive behavior has raised barriers to entry artificially high, forced key competitors out of the market for ad technology tools, discouraged potential competitors from entering the market, and left Google’s few remaining competitors marginalized and unfairly disadvantaged,” it said. Ministry of Justice.

“Today’s lawsuit by the Department of Justice attempts to pick winners and losers in the highly competitive ad tech sector,” a Google spokesperson told Engadget. “It largely duplicates a baseless case by the Texas attorney general, much of which was recently thrown out by a federal court. [The] The Justice Department is fighting a flawed argument that will slow innovation, raise advertising fees, and hinder the growth of thousands of small businesses and publishers.”

Like Bloomberg notes that the case represents the first significant attempt by the Biden administration to challenge the power of one of the nation’s largest technology firms. The agency previously sued Google in 2020. At the time, the Justice Department, under Attorney General William Barr, said the company had a monopoly on search and search-related advertising. It also took issue with the terms surrounding Android, which the Justice Department said unfairly favored Google by forcing manufacturers to preload their devices with the company’s apps and search engine.

Google has faced intense regulatory scrutiny over its influence in the digital advertising market. In 2020, Texas filed a multi-state lawsuit accusing the company of using its “monopoly power to control” ad pricing. A year later, the European Commission launched an investigation into the company’s advertising business, a move that appears to have forced Google to rethink how it handles ads on YouTube. Last year, the Senate also introduced legislation designed to prevent companies like Google from participating in more than one part of the digital advertising ecosystem.

“Having intervened in all aspects of the digital advertising market, Google used anticompetitive, exclusionary and illegal means to eliminate or seriously diminish any threat to its dominance of digital advertising technology,” the Justice Department said in its latest complaint. It accuses Google of using acquisitions to eliminate both “actual and potential” competitors, in addition to abusing its market dominance to prevent publishers and advertisers from effectively using competing products. “Whenever Google’s customers and competitors responded with innovations that threatened Google’s hold over any of these ad technology tools, Google’s anticompetitive response was swift and effective,” the Justice Department said.

In a blog post published after the Justice Department’s lawsuit was announced, Google accused the agency of “trying to rewrite history at the expense of publishers, advertisers and Internet users.” Specifically, Google says it is contesting the Justice Department’s request that the company spin off AdMeld and DoubleCheck, two ad technology firms that Google acquired more than a decade ago. “These transactions were reviewed by regulators, including by [the] DOJ and allowed to proceed,” Google says.

Google also claims that competition in the ad tech sector has increased significantly in recent years. For example, the company points to Microsoft’s recent purchase of AT&T’s former ad-tech wing Xandr and notes that the acquisition enabled Microsoft’s “landmark” ad deal with Netflix. “The government did not challenge this acquisition,” Google states.

Google also accuses the Justice Department of misrepresenting how its ad products work. The company says its suite of products work with competing technologies, making it “easy” for publishers and advertisers to choose the services they want to use. “No one is forced to use our ad technologies — they choose to use them because they’re effective,” Google claims.

One estimate suggests that Google controls as much as 26.5 percent of the US digital ad market. The company’s ad unit is expected to generate about $73.8 billion in U.S. ad revenue next year, with much of that money coming from search ads.

Update at 4:04 PM ET: Added more context from Google.

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