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The Justice Department and eight states on Tuesday filed a lawsuit against Google over its digital advertising business, claiming the tech giant illegally monopolizes the market for online ads.
"One industry behemoth, Google, has corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising," prosecutors wrote in the suit on Tuesday.
The Justice Department also says that the company designed a system to force 2 million advertisers, including parts of the U.S. government such as the military, to pay higher rates. According to the filing, federal agencies and departments have purchased more than $100 million in web advertising since 2019, and had to pay "supra-competitive fees" and "manipulated advertising prices."
For instance, in 2017, Google purchased DoubleClick, which makes widely used advertising tools, for $3.1 billion.
It gave Google direct access to the inventory of website publishers and the ad-serving technology used by those publishers.
Google also controls a major online advertising exchange where companies bid in real time to reach an intended audience on the Internet.
The DoubleClick purchase gave the company power on both sides of online advertising commerce: Selling ads to publishers and influence over the tools publishers use to display ads, not to mention the online auction house where the transactions take place.
Prosecutors allege Google abused that power by essentially rigging the system in Google's favor.
The complaint cites internal communication from a Google advertising executive who compared the company's power in multiple parts of the ad-selling process this way: "The analogy would be if Goldman or Citibank owned the NYSE," a reference to the New York Stock Exchange.
They also describe how Facebook shuttered its advertising technology project when it realized it would be "subject to one bottleneck and intermediary - Google."
"One industry behemoth, Google, has corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising," prosecutors wrote in the suit on Tuesday.
The Justice Department also says that the company designed a system to force 2 million advertisers, including parts of the U.S. government such as the military, to pay higher rates. According to the filing, federal agencies and departments have purchased more than $100 million in web advertising since 2019, and had to pay "supra-competitive fees" and "manipulated advertising prices."
As if 'Goldman or Citibank owned the NYSE'
Authorities allege that the world of online advertising has been slanted to favor Google "for reasons that were neither accidental nor inevitable."For instance, in 2017, Google purchased DoubleClick, which makes widely used advertising tools, for $3.1 billion.
It gave Google direct access to the inventory of website publishers and the ad-serving technology used by those publishers.
Google also controls a major online advertising exchange where companies bid in real time to reach an intended audience on the Internet.
The DoubleClick purchase gave the company power on both sides of online advertising commerce: Selling ads to publishers and influence over the tools publishers use to display ads, not to mention the online auction house where the transactions take place.
Prosecutors allege Google abused that power by essentially rigging the system in Google's favor.
The complaint cites internal communication from a Google advertising executive who compared the company's power in multiple parts of the ad-selling process this way: "The analogy would be if Goldman or Citibank owned the NYSE," a reference to the New York Stock Exchange.
They also describe how Facebook shuttered its advertising technology project when it realized it would be "subject to one bottleneck and intermediary - Google."
