Attorney General Mike Hilgers announced today he will partner with the U.S. Department of Justice (DOJ) and a bipartisan group of state attorneys general in an antitrust lawsuit aimed at breaking up Google’s monopoly over online display advertising.
The lawsuit asserts Google’s anticompetitive conduct in the online advertising marketplace has suppressed alternative technologies and hindered their adoption by publishers, advertisers and rivals. It seeks a breakup of Google’s advertising platforms and injunctive terms to end Google’s dominance of online ad marketplaces.
Online display advertising relies upon complex digital tools to connect website owners selling space on their websites to advertisers looking for customers interested in their products and services. Website publishers in the United States sell more than 5 trillion digital display advertisements each year, which amounts to more than 13 billion advertisements every day.
Google’s dominance of the online display advertising market has allowed it to extract supercompetitive prices from the digital advertising marketplace, resulting in websites earning less and advertisers paying more. The DOJ lawsuit, filed on Jan. 24 in the U.S. District Court for the Eastern District of Virginia, asserts Google violated the Sherman Antitrust Act’s prohibitions against monopolization after a 2008 acquisition of an online advertising company named DoubleClick that was a dominant company in online advertising — controlling 60% of the market share. Federal regulators allowed the purchase at the time because they believed enough alternatives existed that there would still be competition.
However, one year after Google purchased DoubleClick, Google launched its own branded advertising tools and made DoubleClick available only to advertisers who used its internal ad buying tools. Google used exclusive agreements with other tech companies, purchased other competing online advertising technologies and forced advertisers and website publishers to use only Google’s products. This suppressed competition and allowed Google to dominate the online advertising market. The complaint asserts Google keeps 30 cents of every dollar in advertising that passes through the marketplace it now controls.
The lawsuit asserts Google currently controls:
Even Google’s own executives questioned whether the company controlled too much. One Google digital advertising executive asked, “[I]s there a deeper issue with us owning the platform, the exchange, and a huge network? The analogy would be if Goldman or Citibank owned the NYSE.”
The attorneys general from California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia filed the original lawsuit with the DOJ. Nebraska is joining the amended complaint, alongside Arizona, Illinois, Michigan, Minnesota, New Hampshire, North Carolina, Washington, and West Virginia.
