The US Department of Justice (DOJ) on Tuesday accused Alphabet Inc’s Google of abusing its dominance in digital advertising, threatening to dismantle a key business at the heart of one of Silicon Valley’s most successful Internet firms.
The US government said Google should be forced to sell its ad manager suite, tackling a business that generated about 12 percent of Google’s revenues in 2021, but also plays a vital role in the search engine and cloud company’s overall sales.
“Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” the antitrust complaint said.
Google, whose advertising business accounts for about 80 percent of its revenue, said the government was “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 government has said its big tech investigations and lawsuits are aimed at leveling the playing field for smaller rivals to a group of powerful companies that includes Amazon.com Inc, Facebook owner Meta Platforms Inc and Apple Inc.
“By suing Google for monopolizing advertising technology, the DOJ today aims at the heart of the Internet giant’s power,” said Charlotte Slaiman, competition policy director at the Public Knowledge interest group. “The complaint lays out the many anticompetitive strategies from Google that have held our Internet ecosystem back.”
The lawsuit by US President Joe Biden’s administration follows a 2020 antitrust lawsuit brought against Google by the administration of then-US president Donald Trump.
The 2020 lawsuit alleged contraventions of antitrust laws in how the company acquires or maintains its dominance with its monopoly in online search and is scheduled to go to trial in September.
Eight US states joined Tuesday’s lawsuit, including Google’s home state of California.
California Attorney General Rob Bonta said that Google’s practices have “stifled creativity in a space where innovation is crucial.”
Colorado Attorney General Phil Weiser said that Google’s dominance had led to higher fees for advertisers and less money for publishers with ad space to offer.
“We are taking action by filing this lawsuit to unwind Google’s monopoly and restore competition to the digital advertising business,” he said in a statement.
In addition to its well-known search, which is free, Google makes revenue through its interlocking ad tech businesses.
The government asked for the divestiture of the Google Ad Manager suite, including Google’s ad exchange, AdX.
Google Ad Manager is a suite of tools, including one that enables Web sites to offer advertising space for sale and an exchange that serves a marketplace that automatically matches advertisers with those publishers.
Advertisers and Web site publishers have said that Google has not been transparent about where ad fees go, specifically how much goes to publishers and how much to Google.
The lawsuit raises concerns about certain products in the ad tech stack, where publishers and advertisers use Google’s tools to buy and sell ad space on other Web sites.
That business was about US$31.7 billion in 2021, or 12.3 percent of Google’s total revenue.
About 70 percent of that revenue went to publishers.
STEADY: Prices are to rebound following inventory rebuilding demand, TrendForce said, with Samsung Electronics Co further trimming capacity as it slashes DDR4 lines The contract prices of DRAM chips are to rise by as much as 18 percent sequentially this quarter — the first price upticks in about eight quarters — driven mainly by inventory rebuilding demand for DRAM chips used in mobile devices and PCs, TrendForce Corp (集邦科技) projected yesterday. The price rebound is led by a quarterly increase of mobile DRAM chips, which are to climb between 13 percent and 18 percent quarter-on-quarter this quarter, which has not been seen since the fourth quarter of 2021, the Taipei-based market researcher predicted. Likewise, the price of mainstream PC DDR4 DRAM is expected to bounce
CHINA NOT A FRIEND: ‘Newsflash: Democracy is good for your businesses,’ US Secretary of Commerce Gina Raimondo said as she gave a speech at a national defense forum US Secretary of Commerce Gina Raimondo on Saturday urged lawmakers, Silicon Valley and US allies to stop China from getting semiconductors and cutting-edge technologies key to national security. Speaking at an annual national defense forum in Simi Valley, California, Raimondo called Beijing “the biggest threat we’ve ever had” and stressed that “China is not our friend.” The world’s top two economies are locked in a fierce commercial and geopolitical rivalry, in which her department plays a leading role. In October, Raimondo unveiled a series of restrictions on the export of advanced chips to China, including those used in the development of artificial intelligence
A Hong Kong court postponed a court hearing on troubled Chinese property developer Evergrande Group’s (恆大集團) winding-up petition scheduled for yesterday until Jan. 29. Evergrande is trying to win support from its creditors for a plan to restructure more than US$300 billion in debt to stave off liquidation. The company’s lawyer told the court it was requesting an adjournment to “refine” its new debt restructuring plan. The Hong Kong High Court has postponed the hearing over Evergrande’s potential liquidation several times. Judge Linda Chan (陳靜芬) had said in October that yesterday’s hearing would be the last before a decision is handed down. Chan
SOLID FOUNDATION: Given its decades of expertise in megatronics, manufacturing and robotics, Japan has the wherewithal to create its own AI, Jensen Huang said Nvidia Corp plans to help build an artificial intelligence (AI) tech-related ecosystem in Japan to meet demand in a country eager to gain an edge in this emerging technology. The US company will seek to partner with Japanese research organizations, companies and start-ups to build factories for AI, Nvidia CEO Jensen Huang (黃仁勳) said yesterday during opening remarks in a meeting with Japanese Minister of Economy, Trade and Industry Yasutoshi Nishimura. The company is to set up an AI research laboratory, and invest in local start-ups and educate the public on using AI, Huang said. Huang earlier this week met with Japanese Prime