Ferguson’s fourth consumer protection, antitrust lawsuit against Google in the last three years
OLYMPIA — Attorney General Bob Ferguson announced today he will partner with the U.S. Department of Justice (DOJ) and a bipartisan group of eight state attorneys general in an antitrust lawsuit aimed at breaking up Google’s monopolization of online display advertising.
Website producers rely on ad revenue to support open access to a variety of content across the web. Newspapers, for example, depend on online advertising as an important source of revenue. Google’s dominance of the online display advertising market has allowed it to funnel more business through its services, resulting in websites earning less and advertisers paying more.
“Fewer advertising dollars reach website publishers — because of higher ad tech fees and less efficient advertising matches — meaning those publishers have fewer resources to create content for internet users,” the lawsuit states. Newspapers have seen that play out in plummeting revenue. According to a report from the Washington state Joint Legislative Audit and Review Committee report showed that state newspaper revenue declined by approximately 30% between 2015 and 2020.
“An open marketplace encourages competition and creativity,” Ferguson said. “When Google muscles in and dominates the market, everyone loses — except Google. Ending Google’s illegal monopolization of online display advertising is a bipartisan issue.”
DOJ’s lawsuit outlines how companies buy and sell online ads in enormous volumes and in fractions of a second. Online advertisers and website publishers use highly sophisticated, automated tools to get their advertisement on a computer screen of the most likely prospective buyer. Website publishers in the United States sell more than 5 trillion digital display advertisements each year, which amounts to more than 13 billion advertisements every day.
The industry developed tools to automate the process between two key groups: website publishers and advertisers. When a user on the internet opens a webpage with ad space to sell, the tools almost instantly match a website publisher with an advertiser looking to promote its products or services to an individual user.
The DOJ lawsuit, filed on Jan. 24 in the U.S. District Court for the Eastern District of Virginia, asserts Google violated the Sherman Antitrust Act’s prohibitions against monopolization after a 2008 acquisition of an online advertising company named DoubleClick that was a dominant company in online advertising — controlling 60% of the market share. Federal regulators allowed the purchase at the time because they believed enough alternatives existed that there would still be competition.
However, one year after Google purchased DoubleClick, Google launched its own branded advertising tools and made DoubleClick available only to advertisers who used its internal ad buying tools. Google used exclusive agreements with other tech companies, purchased other competing online advertising technologies and forced advertisers and website publishers to use only Google’s products. This suppressed competition and allowed Google to dominate the online advertising market.
The DOJ lawsuit asserts Google’s market share for publisher ad servers soared from 60% in 2008 to 90% by 2015, and that dominance continues through present day. It asserts Google keeps 30 cents of every dollar in advertising that passes through the marketplace it now controls.
The lawsuit asserts Google currently controls:
- The technology used by nearly every major website publisher to offer advertising space for sale;
- The leading tools used by advertisers to buy that advertising space; and
- The largest ad exchange that matches publishers with advertisers.
Even Google’s own executives questioned whether the company controlled too much. One Google digital advertising executive asked, “[I]s 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.”
Due to Google’s monopolization of advertising, website creators earn less and advertisers pay more than they would in a competitive market. The federal lawsuit asserts Google’s anticompetitive conduct in the online advertising marketplace has suppressed alternative technologies and hindered their adoption by publishers, advertisers and rivals. It seeks a breakup of Google’s advertising platforms and injunctive terms to end Google’s dominance of online ad marketplaces.
The attorneys general from California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia filed the lawsuit with the DOJ.
Prior legal cases against Google
In January 2022, Ferguson filed a lawsuit against Google for using a number of deceptive and unfair practices to obtain users’ “consent” to be tracked. Google deceptively led consumers to believe they have control over how their location data is collected and used. As a result of Google’s internal policies, it is nearly impossible for users to stop the company from collecting their location data.
In July 2021, Ferguson filed an antitrust lawsuit as part of a bipartisan coalition of 37 attorneys general against Google for using anticompetitive practices to insulate its app distribution service, Google Play Store, from competition.
In December 2020, Ferguson partnered with a bipartisan coalition of 38 attorneys general to file a federal antitrust lawsuit against Google. The lawsuit asserted that Google illegally leveraged its dominance of online search and search advertising markets, which is a separate issue from online display advertising.
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