Google “has used anti-competitive and illegal methods to eliminate or drastically reduce any threat to its dominance over the technologies used for digital advertising”, the authority claims. The ministry and eight US states, including California and New York, are asking the courts to condemn the Californian group for violating competition laws, to make it pay damages and to order its activities related to the sale of online advertising space abandoned. The complaint explains that Google controls both the technologies used by “virtually all websites” to sell banners or pop-ups to brands, as well as the tools advertisers use to buy those spots, as well as the marketplace where the transactions has taken place . “The harm is clear: website publishers earn less and advertisers spend more,” the plaintiffs claim. “Although Google has dealt with increased competition in recent years, its market share remains unmatched,” notes Insider Intelligence analyst Evelyn Mitchell. According to her, the group collects more than a quarter of all digital ad spend and more than half of ad revenue backed by online searches.
The ministry is “trying to identify winners and losers” in the digital advertising sector, which is “already very competitive,” a Google spokesman replied. The company says it believes that if the ministry prevails, its approach will “slow down innovation, increase advertising costs and make it harder for thousands of small businesses and publishers to grow.” “Competition for advertising revenue is fierce online and offline,” CCIA (Computer & Communications Industry Association) said in a statement. This professional association, which represents the industry, believes that the ministry should take into account the entire advertising market, not just the digital part. “The government’s position that online advertising does not compete with print, radio, television and street signs defies reason,” the CCIA said. But for the ministry and the eight states, it is indeed the internet that is at stake. “An open Internet” is “indispensable to American life,” the initial complaint said. The plaintiffs argue that digital ads are necessary to fund websites and are “bought and sold in vast quantities in fractions of a second,” in a very different way than the way print or broadcast newspapers operate. “More than 13 billion ads are sold every day” online in the United States, the complaints add. They claim that Google has abused its dominant position to exclude its competitors, in particular by “systematically taking control of a wide range of high-tech tools used by publishers, advertisers and other market participants”.
“We accuse Google of capturing publishers’ revenue for their own profit and penalizing those who sought alternatives,” Deputy Minister Vanita Gupta said in a statement. “These practices have weakened the free and open Internet and increased costs for businesses and for the United States government, including the military,” she insisted. This is the second complaint launched by the department against the Californian group since the inauguration of President Joe Biden two years ago. The first, relating to the dominance of its search engine, should lead to a lawsuit this year. Google has already been fined in the past for breaching competition law, notably by the EU. In the United States, the company is already facing lawsuits launched in late 2020 by a coalition of states led by Texas. According to their charges, Google tried to drive out competition by manipulating ad auctions. “Google should be worried,” says Evelyn Mitchell. The company “could be forced to sell some of its advertising business.” Joe Biden recently called on elected Republicans and Democrats to finally agree on laws to better regulate the practices of tech giants.