Department of Justice Sues Google over Digital Ads Practices
Google is facing its second antitrust lawsuit from the Department of Justice in two years, over its dominance in the digital ads market, which has seen the tech giant operate in both the buying and selling of ads in addition to running its ad exchange.
The DOJ is joined in its latest lawsuit by the states of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia.
The new lawsuit, filed on Tuesday, alleges that Google has unfairly tried to control all sides of the digital ads market, operating on both the buying side and the selling side. Google, says the DOJ, sought to be “the be-all, and end-all location for all ad serving.”
“Website creators earn less, and advertisers pay more, than they would in a market where unfettered competitive pressure could discipline prices and lead to more innovative ad tech tools that would ultimately result in higher quality and lower cost transactions for market participants,” says the DOJ lawsuit.
Google’s strategy to dominate digital ads includes acquiring rival ad exchanges and servers, notably its 2008 purchase of DoubleClick. It also included the acquisition of yield management platforms, which allowed publishers to seek better prices outside of Google’s system. Google also changed the terms of its AdX platform to prevent participating publishers from using such tools.
A Google spokesperson defended the tech giant, arguing the DOJ is attempting to “pick winners and losers in the highly competitive advertising technology sector.”
The lawsuit comes amid tough times for Google. Last week, the tech giant announced plans to lay off 12,000 employees as the wider economic downturn in the tech industry. Morale is low among Google employees, who are complaining that their “psychological safety” is at risk.