The U.S. Justice Department has launched a lawsuit against Alphabet’s Google. The lawsuit seeks to force Google to sell its ad manager suite. Advertisers and website publishers have long complained that Google has not been transparent about where ad dollars go. This is the latest move by the government to level the playing field for Big Tech companies such as Amazon, Facebook, and Apple.
While Google remains the market leader by a long shot, its share of the U.S. digital ad revenue has been eroding, falling to 28.8% last year from 36.7% in 2016, according to Insider Intelligence. The Justice Department has asked for a jury to decide the case, which was filed in the U.S. District Court for the Eastern District of Virginia. The 149-page complaint lays out a number of Google’s attempts to dominate the advertising market and argues that the company has the “tech tools to quash the threat.”
The complaint states that Google doubled down on its efforts to manipulate advertisers’ spending to reduce competition from rival ad exchanges after Project Poirot’s initial success. As a result, rivals such as AppNexus/Xandr lost 31% of DV360 advertiser spending, Rubicon lost 22%, OpenX lost 42%, and Pubmatic lost 26%.
Google shares were down 1.6% following the announcement of the lawsuit on Tuesday. The Justice Department’s lawsuit is a significant blow to Google, as the ad technology business is responsible for 80% of its revenue. The case will be heard in the U.S District Court for the Eastern District of Virginia, with a jury to decide the outcome.
