Somewhere in Silicon Valley, a harried Google executive spent Tuesday morning Googling “what’s a monopoly?”
The US Department of Justice already knows… and probably used Bing. After what feels like years of contemplation and prep work, the DOJ has finally and formally accused the search giant of operating an “anticompetitive, exclusionary, and unlawful” monopoly in the digital advertising space. The lawsuit comes roughly six months after the DOJ rejected Google’s offer to split off parts of its ad-tech business in a last-ditch effort to score a Get Out Of Jail Free card.
Do Not Pass Go
Google’s potential knee-jerk defense is pretty simple: in a world shared with Meta, Amazon, TikTok, and other big players, how could it possibly operate a monopoly? Indeed, the company did control “only” some 29% of the US digital ad market last year, according to Insider Intelligence data. But the DOJ is suing on grounds that go beyond the “hey, we’re just one player in a multi-pronged oligopoly” defense. The DOJ is arguing that Google’s prominent role in multiple parts of the digital ad ecosystem — from tools for publishers to sell ad space, tools for advertisers to buy ad space, and an exchange that links bidders and sellers in the blink of an eye — allows it to flex its anticompetitive muscles in sundry other ways.
The roughly 150-page lawsuit, filed in Virginia’s Eastern District federal court, traces Google’s overreach all the way back to its 2008 acquisition of ad-serving company DoubleClick. From there, the DOJ sketches out a pattern of allegedly calculated, anti-competitive behavior — creating a central pillar of Google’s business while rocking the digital publishing economy:
- “Google keeps at least thirty cents—and sometimes far more—of each advertising dollar flowing from advertisers to website publishers through Google’s ad tech tools,” the DOJ alleges. “Google’s own internal documents concede that Google would earn far less in a competitive market.”
- Overall, digital advertising accounted for roughly 80% of Google’s business, with 12% — or roughly $32 billion — coming from the ad-brokering activity that the DOJ is honing in on. Clearly, the government’s call for the divestiture of Google’s ad exchange would significantly alter the company.
From the Gmail Archives: Included in the suit is an illustrative quote from one of Google’s own executives in internal communications explaining the company’s hands-in-every-cookie-jar approach to the digital ad space: “Is there a deeper issue with us owning the platform, the exchange, and a huge network? The analogy would be if Goldman or Citibank owned the NYSE.” The search giant is no doubt doing some soul-searching about how its executives talk to one another.