Google faces an Antitrust Lawsuit for Abusing Monopoly in Online Advertising

The United States Department of Justice has just filed its second antitrust lawsuit against Google. It accuses Google of illegally abusing its monopoly over the technology that underpins online advertising. This new lawsuit, which seeks to force Google to divest parts of its online advertising business, is the first filed under the Biden Administration against the company.

Google's advertising business has been chastised for its market positioning as it operates on multiple fronts. Which, provides it with unique insight and potential leverage. Google denies dominating the online advertising market and points to competitors such as Facebook's market share.

According to the complaint, Google "corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the vast array of high-tech tools used by publishers, advertisers, and brokers to facilitate digital advertising."

It is the fifth antitrust lawsuit filed against Google by US officials since 2020. Amazon, Google, Apple, and others have faced antitrust investigations and charges in Europe, while regulators have passed new laws to limit the harms of social media and some practises, such as data collection.

In an effort to avoid a lawsuit from the US Department of Justice, Google offered in July to split the part of its business that auctions and places ads on websites and apps into a separate company under the Alphabet umbrella.

The Justice Department made no response to the offer, and it was unclear whether they would accept anything less than an asset sale. In the European Union, the company faced a similar ad-tech investigation after offering to allow competitors to broker the sale of ads directly on YouTube.

Google is unquestionably a large and influential organization. However, many other companies and competitors in the field are already gaining market share. TikTok's market share in the digital ad market had more than doubled by 2022. Amazon accounted for 11.7% of US digital ad spending last year, with that figure expected to rise to 12.4% by 2023.

Then, why only Google?

It makes sense given that Google leaves no room for legitimate competition in the ad tech industry to ensure opportunities for all. According to the Justice Department, Google's dominance allows it to keep at least $0.30 of every dollar advertisers spend through its online advertising tools.

Competition in the advertising market is important for a variety of reasons. It paves the way for innovation, better quality at a lower price, and fairness in consumer choice.

In this case, if the Department of Justice eventually wins the lawsuits, it could cause significant changes in the online advertising market. It will probably affect how advertisers reach their audiences and allocate their ad budgets.

As Google is forced to divest a large portion of its ad technology products, marketers may be forced to pay more to reach the same audiences. Or they may have to end up seeking other expensive ad platforms.

Litigations may also stifle innovation and reduce the development of new technologies, features, and products that benefit marketers. It is not just applicable for Google but for all ad platforms that may feel hesitant to come up with new products and services.

Digital marketing is essential for any business to thrive in today's competitive market. That said, it is no wonder that this heated antitrust fight leaves marketers agitated. But, be it Google or other tech companies, facing legal challenges for advertising practises is not anything new.

Ultimately, if Google loses the battle, we believe the overall impact it will have on the online marketing landscape will be enormous. But for now we will have to wait and watch with fingers crossed on the final verdict!