The Department of Justice on Tuesday filed its second antitrust lawsuit against Google over its digital ad practices. The federal government said the tech giant is trying to control both the buying and selling of digital ads, to the detriment of competition and fair exchange.
The goal of the suit, the first filed against the company under the Biden administration, is to break up its digital ad business. Google shares fell 1.3% Tuesday afternoon after the news broke.
The most recent suit looks to force the company to divest sections of its business. The previous legal action, filed late in the administration of former President Donald Trump, accused the company of stifling competition for web searches by entering into exclusionary agreements.
That trial is expected to begin in September.
There is much at stake in the federal government’s antitrust suits. Google’s advertising revenue hit $54.5 billion for just the quarter ending Sept. 30. Ad dollars poured in from Search, YouTube, Google Network ads, and other sources.
The Justice Department filed an antitrust lawsuit against Google that accuses the internet search giant of unlawfully bullying competitors that challenge its dominance in the digital advertising marketplace. #TWTFrontPagehttps://t.co/m2PVYgyLTd
— The Washington Times (@WashTimes) January 25, 2023
This latest DOJ action alleges that the company has attempted to be the “be-all, and end-all location for all ad serving.” Government lawyers say Google’s actions mean that “website creators earn less, and advertisers pay more” than they would in a market featuring true competition.
Forcing the company to divest its many digital ad holdings would, according to the lawsuit, result in “higher quality and lower cost transactions for market participants.”
Google for many years has targeted its rival ad exchanges and servers for acquisition. It purchased yield management platforms that enabled content publishers to locate better deals outside of the company’s platforms.
The company also took steps internally, changing its terms of service to prevent its publishers from using tools to locate better pricing.
Google is defending itself, and a spokesperson accused the DOJ of trying to “pick winners and losers in the highly competitive advertising technology sector.”
Like much of the tech sector, Google is navigating troubling times. Last week the tech giant announced plans to lay off 12,000 employees. The downturn in the industry has reportedly lowered morale among employees, who once enjoyed solid job security.