Il Department of Justice (DOJ) of the United States and eight federal states are suing the web giant Googlecalling for the dismantling of its business that handles advertisements, for an alleged illegal monopolization of the digital advertising market.
At the end of the Wall Street session, the stock Alphabet, parent company of Google, extended its declines on the news, closing down 2% at $97.7 a share. In the last 12 months the title has lost the 23%underperforming the index Nasdaq 100.
Google is the dominant player in the digital advertising market, which is valued at $278.6 billion. The web giant controls most of the technology used to buy, sell and serve online advertising.
The DOJ said Google’s dominance allows it to make at least cash $ 0,30 on every dollar spent by advertisers through its online advertising tools.
“The lawsuit we filed today seeks to hold Google accountable for what we argue are its long-standing monopolies in digital advertising technologies that content creators use to sell ads and advertisers use to buy ads across the Internet,” it said. Jonathan Kanter the DOJ’s antitrust chief at a news conference Tuesday.
New York, California and Virginia were among the states that signed the complaint, which was filed at federal court in Virginia.
It was not missing Google’s answerthe web giant claimed the cause “attempts to pick winners and losers in the highly competitive ad technology industry. The case “largely reproduces an unsubstantiated lawsuit by the Texas attorney general, much of which was recently dismissed in federal court. The Justice Department is double-crossing a flawed argument that it would slow innovation, drive up advertising rates, and make it harder for thousands of small businesses and publishers to grow.”
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The Biden administration challenges the tech giants
Justice Department lawsuit against Alphabet’s Google adds to allegations of anti-competitive conduct against the tech sector dominated by Alphabet Google, Amazon.com, Apple e Meta Platforms.
Lawmakers have accused tech companies of acting as gatekeepers who use their structural advantages in the online economy to disadvantage competitors and stifle innovation. These four companies are facing or have been subject to 15 antitrust investigations or complaints from federal and state law enforcement agencies that challenge key parts of their business models and, in some cases, attempt to close key acquisitions.
Returning to Google, the lawsuit represents the first major case of theBiden administration challenging the power of one of the largest technology companies in the United States, following an investigation begun under the former president, Donald Trump. Also, it’s one of the few times the Justice Department has called for the dissolution of a major company after the dismantling of the telecommunications system Bell in the 80s.
The resolution of the case could be years away. According to the complaint “Google’s pervasive power over the entire ad technology industry has been challenged by its own digital advertising executives. “The analogy would be if Goldman or Citibank owned the NYSE.”
DOJ accuses Google of anti-competitive conduct
The DOJ’s antitrust chief Kanter said during the press conference that Google has engaged in anticompetitive conduct over the past 15 years, including a “acquisition model to achieve market dominance“.
These include the 2007 takeover of the online advertising giant DoubleClick per $3.1 billionwhich the DOJ is seeking to dissolve, the 2010 agreement to purchase Invite Media per 81 million dollars and the purchase in 2011 of AdMeld per 400 million dollars.
The Justice Department complaint also seeks damages from Google for allegedly overcharging federal government agencies, such as the US military, that bought online ads.
The agency said that since 2019, the US government has spent more than 100 million dollars in online advertisements, but the complaint did not state the amount the Justice Department is seeking to recover.