The lawsuit, filed by ten attorney generals, says that Google has made a deal with Facebook to limit the offer so that the online ad space could dominate.
Ten attorney generals filed a lawsuit against Google on Wednesday, alleging that the company was illegally using its monopoly in the online advertising industry to impose competition through a series of negative tactics.
“Plaintiffs seek to restore free and fair competition in these markets and provide structural, behavioral and financial assistance to prevent Google from engaging in fraudulent business practices and abusing its monopoly power to eliminate competition and harm consumers.”
Eliminate costs for publishers, advertisers, and intermediaries. The complaint claims that the fundamental change in Google’s advertising industry came in 2007 when it acquired DoubleClick, which gave the company access to DoubleClick’s ad management software and database of web publishers, advertisers, and advertising agencies.
With the new intermediary position between ad exchange platforms and publishers, Google has required publishers to license Google’s ad server and market the company’s market to access more than 1 million advertisers who use Google to advertise. For sale. Invitation. “So Google can ask both on the buyer’s side, where it received a commission, and on the seller’s side, where it received a second commission, and it can also place the transaction where it has an even bigger third party.” withdrawn, ” the claimants said in their lawsuit.
To strengthen the competition. After Google became the dominant player in the display ad space, it imposed a unique business rule on publishers that prevented them from sending their inventory to other ad exchange platforms.
When the offer for the title threatens to undermine Google’s position, it launches the exchange offer, which aims to eliminate competition in a number of ways, including attracting other portfolios to entice users to join publishers. auction shares and additional sales fees for issuers of shares on a non-Google stock exchange.
“The idea is that Google can control the whole process, generate higher returns on a large scale and reduce competition,” said Greg Sterling, vice president of Market Insights at Uberall and former co-editor of Search Engine Land.
Collaboration with Facebook. In 2017, Facebook announced that the Facebook Audience Network would be launched on major platforms, offering publishers an alternative to Google services.
One of the ways Google has the momentum to make headlines and effectively reduce the threat to the company’s advertising revenue is to strike a deal with Facebook.
Finally, Facebook limited its involvement in displaying the title, and in return, Google provided Facebook with “information, speed, and other benefits” for the auctions Google offers for its stock of mobile apps in the United States. Facebook was not identified as a suspect in the case.
Google response. A Google spokesman told Search Engine Land:
“Attorney General Paxton’s claims about advertising technology are relentless, but despite all the facts, he insisted. We invested in the latest advertising technology that helps businesses and consumers. The price of digital ads has also gone up.” Ad technology fees are below the industry average. These are the hallmarks of a highly competitive sector. We will defend ourselves vigorously in court against your unfounded claims.
If the case is heard, “it may take several years to get a result, and if there is an unfavorable outcome for Google, it will appeal the decision and take more time,” said Sterling. Meanwhile, the scenario remains the same for advertisers and publishers.
How Google’s alleged practices affect businesses and consumers. “What the case says is that there really is no one who can compete with Google and that hurts publishers because there are fewer places to go and therefore prices can go up,” said Sterling. they are artificially inflated and damaged and consumers are harmed.
“The monopoly tax that Google imposes on US companies. It is a tax ultimately borne by US consumers through higher prices and lower quality of goods, services, and information provided by those companies.” “Every American suffers when Google imposes a price monopoly on the sale of targeted ads,” the complaint said.
Why do we care?
If there are internal documents that indicate collusion between Google and Facebook, it paints a bleak picture of Google and lends more credibility to the allegations described in the complaint. If a judge makes a formal decision, it could include damages or “ structural ” changes above, which could mean Google selling parts of its advertising business or changing certain ad policies.
However, Google has a lot of resources and will do whatever it takes to win, and if that’s not possible, they can negotiate a feature or an agreement.
“The outcome of these lawsuits against these big companies [Facebook, Google, and other big tech companies] reflects the consensus in political circles, in Congress and at the state level,” said Sterling, “although these companies have a lot of money and can imagine that that would be completely intact, at the same time, it is difficult to imagine major structural changes in the market.