US sues Google to force breakup of tech giant’s ad business

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The US Justice Department and eight states sued Alphabet’s Google, calling for the break up of the search giant’s ad-technology business over alleged illegal monopolisation of the digital advertising market.

DOJ is doubling down on a flawed argument that would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow.”The stock slid 23% in the 12 months ended Monday, underperforming the Nasdaq 100 Index.

It also marks one of the few times the Justice Department has called for the breakup of a major company since it dismantled the Bell telecom system in the 1980s. “Google’s pervasive power over the entire ad tech industry has been questioned by its own digital advertising executives,” according to the complaint.The lawsuit marks the DOJ’s second antitrust suit against Google and the fifth major case in the US challenging the company’s business practices.

Those include the 2007 acquisition of online advertising giant DoubleClick for $3.1 billion, which the Justice Department is now seeking to unwind, the 2010 deal to buy Invite Media for $81 million and the 2011 purchase of AdMeld for $400 million. The allegations in the DOJ’s suit mirror those brought by attorneys general in 16 states plus Puerto Rico in 2020. That lawsuit is pending in New York federal court.

Google alone is expected to generate some $65.7 billion in digital ad revenue in the US this year, representing about 26.5% of the market, while YouTube represents another 2.9%, according to EMarketer.

 

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