Google is under fire as the federal government is accusing Alphabet — Google’s parent corporation — of violating anti-trust laws.
Eight states joined the Justice Department in its lawsuit against Google for abuse of power in Big Tech.
“The lawsuit said Google had ‘corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of hi-tech tools used by publisher, advertisers and brokers to facilitate digital advertising,’” according to a report in The New York Times.
Since 2020, at least five antitrust complaints have been filed against the search engine.
The multi-state lawsuit accuses Google of dominating the internet advertising market, suppressing dissent, and prioritizing paid listings for a cut of the profits.
“Each time a threat has emerged, Google has used its market power in one or more of these ad tech tools to quash the threat,” the complaint states. “The result: Google’s plan for durable industrywide dominance has succeeded.”
In 2007, Google made the successful acquisition of the internet advertising powerhouse DoubleClick.
Between then and 2021, the internet search engine increased its advertising revenue to $31.7 billion – despite having just over $16 billion in total revenue 15 years ago.
In an attempt to mitigate the Big Tech slowdown, Google has announced the layoff of 12,000 employees to focus on Artificial Intelligence projects.
Google’s search engine has been the crux of the company’s profits – but it may soon have to reorganize its industry-dominating model.
Google spokesman Peter Schottenfels pushed back on the criticism, saying that the lawsuit against the Alphabet company “attempts to pick winners and losers in the highly competitive advertising technology sector.”
Publishers on the search engine would say otherwise.
Facebook’s parent company, Meta, recently came under scrutiny after the Federal Trade Commission (FTC) requested a judge block the social media entity’s purchase of a virtual-reality start-up company – citing a potential disruption of competition.
Google has inflated its ad prices and reduced its payment to publishers over recent years the complaint alleges.
“The Justice Department and the states, which include New York and California, said that Google built its monopoly by buying up crucial tools that delivered ads to publishers. As a result, advertisers paid more for space on the internet and publishers made less money, as Google took its cut.”
When an online user puts a phrase into Google search, the results are dominated by paid advertisements. The Alphabet company’s strategy of prioritizing profits over people has landed them on the DOJ’s radar.
The lawsuit is an effort by the federal government to level the playing field and hold the allegedly monopolistic company accountable for ignoring the will of the people when searching for information on the internet.
Original reporting by David McCabe and Nico Grant at The New York Times.
Follow Ty Ross on Twitter @cooltxchick