DOJ sues to break up Google’s ad business

The United States Department of Justice has moved forward with a lawsuit that seeks to force Google to divest a significant chunk of its advertising business, a move which would have huge knock-on effects on the advertising industry.

The lawsuit, filed on Tuesday (Jan. 24), argues that Google has “corrupted legitimate competition” in the ad tech industry by “seizing control” of the wide swathe of tools that facilitate digital advertising.

Google is the only technology provider across the full ad tech supply chain that also sells ad inventory on its own properties.

The suit accuses Google of abusing its “monopoly power” to disadvantage publishers and advertisers who use competing ad tech products. 

It said Google’s conduct means creators and publishers earn less and advertisers pay more than they would in a more competitive market.

“This conduct hurts all of us,” the lawsuit states.

Eight states — California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia — also signed on to the suit.

The DOJ is calling for, “at a minimum,” the divestiture of the Google Ad Manager suite, including DoubleClick for Publishers (DFP) and ad exchange AdX. 

The suit also requests Google pay damages for violating antitrust laws.

This lawsuit has been in the works for some time. Google offered a series of concessions to its ad business last year — including spinning parts out into a separate company under parent Alphabet and opening up YouTube inventory to third-party sellers — to avoid a potential lawsuit from the DOJ.

It’s the latest attempt to break up Google’s more than $150 billion ad business, a source of contention in the industry for many years. 

A group of U.S. senators introduced a bill last May that would prohibit companies processing more than $20 billion per year in digital ad transactions from participating in more than one part of the digital ad ecosystem.

Google’s ad tech dominance is also being scrutinized in Australia and Europe.

Arielle Garcia, chief privacy officer of UM, told Campaign US: “The DOJ suit against Google is not unexpected, illustrative of the sustained international regulatory scrutiny on platforms, as we've seen with the EU Digital Markets Act. Increased competition and greater transparency are foundational to a healthy digital ecosystem, and would benefit marketers and consumers alike.”

The DOJ also sued Google in 2020 for alleged anti-competitive tactics in its search business. The case, which centers around how Google is the default search engine across numerous browsers and phone manufacturers, is still ongoing.