Why the US Government’s Google Lawsuit Matters
Antitrust sentiment focused on Big Tech has been brewing in both parties for years, and this week, the Department of Justice delivered with a lawsuit against Google for alleged anti-competitive behavior.
The DOJ claims that the search giant has gained and exercised monopoly control over the digital advertising market. Specifically, it claims that Google’s suite of online advertising tools prevents competitors from entering the online ad market and blocks publishers from monetizing content.
That last part is a well-worn complaint about Google as it increasingly fills its search engine results pages (SERPS) with its own results, rather than links to others. This complaint applies on local levels, as players such as Yelp have long argued that its results are increasingly pushed out of Google SERPS.
According to the complaint:
One industry behemoth, Google, has corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising. Having inserted itself into all aspects of the digital advertising marketplace, Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies.
Tinkering with SERPs alone isn’t illegal, as Google has exercised innovation and rigor in becoming a market-leading platform that everyone wants to use, and it can design its product as it sees fit. The monopoly designation factors in when it uses that position of dominance to stifle competition. The complaint focuses on adtech tools such as Google’s campaign management platform and ad exchange, but it could just as well apply to local search.
And that’s where this DOJ lawsuit lies, claiming that Google illegally uses monopoly power. The DOJ argues that the only way to solve that problem is to break up Google by forcing it to divest components that allow it to carry out allegedly anti-competitive behavior. So, if the DOJ gets its way, Google will go the way of Ma Bell.
Meanwhile, Google not surprisingly claims that it hasn’t acted illegally and that the digital ad market is adequately competitive. It often points to competitors such as Meta and Amazon while making this case (which carries less weight today, at least for the former). TikTok has recently joined this list.
The groundwork on this lawsuit has been carrying on in the background for years, with several clues that it was underway. So it’s not a complete surprise, though it’s still a landmark event. Eight states join the federal entity in this complaint, including New York, California, Colorado, and a handful of others.
For marketers, the big question here is whether Google’s tools are more useful or harmful — are the convenience and scalable audiences they enable worth the cut Google takes out of the digital ad market, raising prices? This is among the questions Google will have to answer.