Will Biden Unpack Google?
The lawsuit by the Justice Department aims to separate online advertising trading operations from Google: according to the indictment, the company would abuse its dominant position. All the details
Google in Biden's crosshairs?
The US Justice Department lawsuit against Google, filed on Tuesday for reasons related to the company's alleged abuse of its dominant position in the online advertising market, could be one of the most important antitrust cases ever. And it could lead to the "unpacking" of the company, ie the spin-off of part of its business into an entity not controlled by Alphabet, the holding company that owns the Internet search giant.
THE DEPARTMENT OF JUSTICE PROSECUTION AND GOOGLE'S DEFENSE
According to the Department of Justice – joined by eight US states, such as California and New York -, Google has illegally monopolized the online advertising market for years, acquiring a large part of the technologies used to buy and sell ads on websites, which neither advertisers nor buyers can waive, and acting as an intermediary between the two parties.
Google also sells its own advertising space on sites like YouTube.
The US government thinks that Google has built a system – the acquisitions of DoubleClick (2008), AdMob (2009), Invite Media (2010) and AdMeld (2011) were fundamental to this end – which forces advertisers to pay higher than what a competitive market could guarantee. According to the indictment, Google gets 30 cents of every dollar spent by advertisers on its tools for positioning advertising on the web.
The company defended itself by arguing, on the contrary, the existence of strong competition in the online advertising market (the US one, the largest, is worth over 278 billion dollars): it indicated Meta, Microsoft and Amazon as its main rivals. According to Google, the Justice Department's intervention in the sector will have the effect of "slowing down innovation, driving up advertising rates and making it more difficult for thousands of small businesses and publishers to grow".
THE GOAL OF THE AMERICAN GOVERNMENT
The one opened on Tuesday isn't Google's first and only antitrust lawsuit in the US: There are now five in all, as of 2020, targeting its online search, digital advertising, app distribution and usage of the Android mobile operating system.
Through the Department of Justice, the goal of the American government – since the days of ex-President Donald Trump – is to counter any anti-competitive practices in the digital economy sector, so as to ensure fair conditions that can stimulate the innovation today and in the future.
TIMES
John Sisco, a POLITICO journalist specializing in competition law, wrote that the Justice Department lawsuit probably won't be concluded for two years, not counting any appeals from Google.
The department wants to obtain the separation from Google of the entity that deals with online advertising, a key source of revenue for parent company Alphabet.
THE AMERICAN TIGHTEN ON BIG TECH
According to Sisco, the regulatory tightening of the American authorities will not stop at Google but will also target other technology companies, or "Big Tech". The Justice Department is already working on an antitrust case against Apple, while the Federal Trade Commission (the agency that deals with competition and consumer protection) has been investigating Amazon 's activities for years.
The last Congress, the one before the midterm elections, was working on antitrust laws that targeted Google, Amazon, Meta, Apple and Microsoft. However, they have not been approved, and according to Sisco it is unlikely that they will be able to be approved now, given the rift between Democrats and Republicans.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/google-pubblicita-online-monopolio-obiettivi-causa/ on Wed, 25 Jan 2023 09:35:54 +0000.