Illinois joins antitrust lawsuit accusing Google of monopolizing advertising technology
CHICAGO (CBS) -- Illinois has joined an anti-trust lawsuit against Google, accusing the company of monopolizing digital advertising technologies to buy and sell ads.
The U.S. Department of Justice, Illinois Attorney General Kwame Raoul, and attorneys general in 16 other states filed the lawsuit in federal court in Virginia.
The lawsuit claims Google controls the technology used by nearly all website publishers for ad space, causing website creators to earn less money while advertisers pay more.
"Google has created an unlawful environment in the digital world that has caused harm to online publishers and advertisers by weakening a free and open internet," Raoul said in a statement. "Google cannot continue its monopolies in digital advertising technologies. I am proud to join the Department of Justice and a bipartisan coalition of attorneys general in this critical lawsuit for accountability."
It's the fifth federal antitrust suit against the Alphabet-owned company since 2020, when the DOJ sued it over what the government claims is a monopoly in search.
By buying up competitors and steering potential customers to its own products, Google "has corrupted legitimate competition in the ad tech industry," the government said in its complaint. "Google uses its dominion over digital advertising technology to funnel more transactions to its own ad tech products where it extracts inflated fees to line its own pockets at the expense of the advertisers and publishers it purportedly serves," the suit states.
Attorney General Merrick Garland said that Google has "severely weakened" competition in the ad tech industry.
"First, Google controls the technology used by nearly every major website publisher to offer advertising space for sale. Second, Google controls the leading tool used by advertisers to buy that advertising space. And third, Google controls the largest ad exchange that matches publishers and advertisers together each time that ad space is sold," Garland said when the lawsuit was first filed in January.
As a result, he added, "website creators earn less and advertisers pay more." And this means fewer publishers can offer their content without subscriptions, paywalls and other fees to make up for revenue.
The lawsuit claims Google keeps at least 30 cents of every dollar in advertising that passes through its digital advertising technology products. The lawsuit aims to break up Google's advertising platforms.
The government wants Google to break off Google Ad Manager, which handles the buying and selling of ads and incorporates the exchange where the bidding takes place, from its core business of search, YouTube and other services like Gmail.
The company makes more than 80% of its revenue from advertising, totaling $209 billion in 2021, the most recent year available.
Google disputes that its advertising practices hurt competition, saying the lawsuit "attempts to pick winners and losers in the highly competitive advertising technology sector.
"It largely duplicates an unfounded lawsuit by the Texas attorney general, much of which was recently dismissed by a federal court," the company said in a statement in January. "DOJ is 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."
A company spokesman noted that programmatic ads, which are at issue in the DOJ's suit, form a smaller portion of the company's revenue than overall advertising — about 12%.