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A man using a mobile phone walks past Google offices in New York on December 17, 2018. The US Department of Justice is preparing a new antitrust suit against Google, this time targeting its dominance of the ad-tech market. Photo: AP
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Google’s ad-tech business faces lawsuit from US Justice Department, its second antitrust case

  • The US Department of Justice has accelerated an investigation of Google’s digital advertising practices, and a lawsuit could come as soon as this year
  • The DOJ under the Trump administration previously sued Google over its search business, and state attorneys general also sued over digital ad practices
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US antitrust officials are preparing a second monopoly lawsuit against Alphabet Inc’s Google over the company’s digital advertising business, according to a person familiar with the matter, stepping up the government’s claims that Google is abusing its dominance.

The Justice Department has accelerated its investigation of Google’s digital advertising practices and may file a lawsuit as soon as the end of the year, said the person, who declined to be named because the investigation is ongoing. No final decisions have been made and the timing could be pushed back. 

Google touched a low in extended trading on the news, falling 0.6 per cent to US$2,888 at 5:03pm in New York.

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The department’s scrutiny of Google’s control of the ad tech market goes back to the Trump administration. The DOJ under then-Attorney General William Barr sued Google over its search business instead, alleging the company used exclusive distribution deals with wireless carriers and phone makers to lock out competition.
That case was followed by a separate antitrust complaint filed by a group of state attorneys general led by Texas, which accused Google of illegally monopolising the digital advertising market. The states said Google reached an illegal agreement with Facebook Inc to manipulate the online auctions where advertisers and website publishers buy and sell ad space.

That agreement with Facebook is also part of the DOJ’s investigation, said the person. The Justice Department declined to comment.

Google disputes that it dominates the ad tech market, arguing that the space is crowded with major companies like Amazon.com Inc, Comcast Corp and Facebook competing for business. It also denies the states’ claim that it’s manipulating auctions to benefit Facebook.

“Our advertising technologies help websites and apps fund their content, enable small businesses to grow, and protect users from exploitative privacy practices and bad ad experiences,” the company said in a statement. “There is enormous competition in advertising tools, which has made online ads more relevant, reduced fees, and expanded options for publishers and advertisers.”

02:06

Facebook, Amazon, Google and Apple respond to Congress about whether China steals US technology

Facebook, Amazon, Google and Apple respond to Congress about whether China steals US technology

Bloomberg reported in June that officials from the Justice Department’s antitrust division had stepped up scrutiny of Google’s ad practices and had interviewed multiple Google competitors about the company’s conduct.

Another Justice Department lawsuit against Google would underscore President Joe Biden’s push to toughen antitrust enforcement in an effort to boost competition across the economy. Biden has nominated Google critic Jonathan Kanter to run the department’s antitrust division. Kanter has long represented companies that have pushed competition enforcers to take action against Google, including News Corp and Yelp Inc.

The Mountain View, California-based company owns major pieces of the online ad market. It runs an ad-buying service for marketers and an ad-selling one for publishers, as well as a trading exchange where both sides complete transactions in lightning-fast auctions.

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These exchanges operate like online stock-trading platforms with an automated bidding process. Competitors and publishers have complained that Google leverages parts of this vast network, like its ad exchange, to benefit other areas and kneecap rivals. 

Overall, these ad-tech products generated US$23 billion in gross revenue for the internet giant last year. Google has argued that it pays out much of these ad-tech sales to web publishers.

This article appeared in the South China Morning Post print edition as: Google faces new antitrust lawsuit
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