As the federal government’s antitrust lawsuit barrels on, Google’s conduct within the digital advertising market is the subject of yet another proposed class action alleging the embattled tech company has risen to power in the space through a pattern of “pervasive monopoly conduct” aimed at extinguishing competition.
The Washington D.C. private guided tour business behind the 48-page lawsuit alleges Google has achieved dominance in the online advertising market in part by acquiring rivals, conditioning access to search-results data and YouTube’s video ad platform on the purchase of separate display advertising services, and ensuring its systems are not compatible with those of competitors.
Front and center in the complaint is the recent Department of Justice enforcement action against Google, which similarly targets the company’s apparent anti-competitive conduct within the online search and digital ad markets. According to the lawsuit, 11 states have signed onto the DOJ’s case.
In all, Google has unlawfully maneuvered to control the “ad tech stack,” which consists of the intermediary services between advertisers, who pay to place digital ads, and publishers who publish those ads on their websites, the complaint says. The result of Google’s conduct has been the elimination of choice within the lucrative online ad business, as prospective advertisers increasingly have nowhere to turn to place ads but to the Mountain View, California search giant, the suit says.
“Companies that wish to place or publish online advertisements have little choice but to pay Google for its advertising services, including its instantaneous auction platforms, and Google’s monopolization of this intermediation market has enabled it to favor its own advertising platforms and products,” according to the lawsuit.
The fees charged by Google in order to place ads through its services amount to “monopoly rents” that have caused advertisers and consumers to pay higher prices while publishers receive lower payments for displaying ads, the complaint goes on to claim. Per the suit, the plaintiff has experienced these effects directly in placing ads online using Google’s platforms.
The lawsuit summarizes the plaintiff’s allegations against Google by touching on each level of harm the company purportedly caused—including to the consumers who end up seeing advertisers’ display ads and the employees of advertisers—by purposely boxing competition out of the online advertising market:
“The foreclosure of competition in digital advertising markets resulting from Google’s monopoly has harmed the public at large. When advertisers pay supra-competitive fees to brokers like Google for placing ads, they pass on a portion of those costs to their customers by marking up the prices of their goods and services. And when publishers receive anticompetitive underpayments for running ads, they are often forced to cut costs, including through layoffs, and hence cannot produce content of the same quality or variety. By eliminating competition, Google’s display advertising monopoly also has reduced the incentive to innovate in these markets and thereby deprived the public of the benefit of improvements in advertising services and delivery.”
The lawsuit looks to represent all persons and entities in the United States who, from January 1, 2016 to the present, used Google’s display advertising services to (1) place an ad on a website operated by another entity (advertisers) or (2) place an ad from a third party on their own website (publishers).
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