Google faces antitrust lawsuit in the US over digital advertising tech

Google faces a second competition lawsuit in the United States this week over the tech giant’s technology that matches online publishers to advertisers.

The Department of Justice and multiple US states allege that Google monopolises key digital advertising technology products, monopolising the technology that publishers depend on to sell ads and advertisers use to buy them.

“The harm is clear: website creators earn less, and advertisers pay more,” the government said in the complaint against Google, adding that competition could “discipline prices and lead to more innovative ad tech tools”.

This means that fewer publishers can offer content “without subscriptions, paywalls, or alternative forms of monetisation,” the plaintiffs said.

The trial over Google’s advertising tech begins on Monday in Alexandria, Virginia and comes after a major antitrust defeat for Google in early August over its search engine, which generates the majority of the company’s revenue.

Selling off parts of Google

A US judge ruled that Google has been using its search dominance to stifle competition. The ruling marked a setback for the search giant and its parent company Alphabet.

In that case, the judge has not yet imposed any remedies. The government hasn’t offered its proposed sanctions, though there could be close scrutiny over whether Google should be allowed to continue to make exclusivity deals that ensure its search engine is consumers’ default option.

Peter Cohan, a professor of management practice at Babson College, said the Virginia case could potentially be more harmful to Google because the obvious remedy would be requiring it to sell off parts of its ad tech business that generate billions of dollars in annual revenue.

“Divestitures are definitely a possible remedy for this second case,” Cohan said. “It could be potentially more significant than initially meets the eye”.

Google’s digital advertising practices are not only under scrutiny in the US.

The UK Competition and Markets Authority said last week that it provisionally found Google “abused its dominant positions through the operation of both its publisher ad server and buying tools to restrict competition in the UK”.

Meanwhile, the European Commission said last year that in “its preliminary view” Google’s ad technology breached EU antitrust rules.