US sues Google for abusing dominant position in digital ads biz

The US Justice Department sued Google for anticompetitive, exclusionary, and unlawful means to eliminate competition in the digital advertising business, insisting it should sell its ad manager suite,

Google argued that the government’s argument is flawed and would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow.

The US is trying to level the playing field for rivals to Big Tech companies including Amazon.com, Meta Platforms, and Apple Inc.

The legal proceeding follows a 2020 antitrust lawsuit brought against Google, which alleged antitrust law violations in how the company acquires or maintains its dominance with its monopoly. It is scheduled for trial in September.

California State Attorney General Rob Bonta describes Google's practices as having "stifled creativity in a space where innovation is crucial."

Colorado Attorney General Phil Weiser said that Google's dominance had led to higher fees for advertisers and fewer earnings for publishers with ad space to offer.

Google shares were down 1.9 percent on Tuesday.

Google generates income from its interconnected ad tech businesses. The Google Ad Manager suite, which includes Google's ad exchange, AdX, was requested to be sold by the government.

Publishers and advertisers have expressed dissatisfaction with Google's lack of transparency over the distribution of advertising funds, specifically the proportion that goes to publishers and the remainder to Google.

The new lawsuit raises concerns about certain products in the ad tech stack, where publishers and advertisers buy and sell ad space. That business was about $31.7 billion in 2021 or 12.3 percent of Google’s total revenue. About 70 percent of that revenue goes to publishers.