US justice department set to sue Google over digital ad market dominance

The US Justice Department (DOJ) is poised to sue Alphabet’s Google as soon as Tuesday regarding its dominance over the digital advertising market, Bloomberg News reported on Monday, citing people familiar with the matter.

The lawsuit would be the second federal antitrust complaint filed against Google, alleging violations of antitrust law in how the tech giant acquires or maintains its dominance. The Justice Department lawsuit filed against Google in 2020 focuses on its monopoly in search and is scheduled to go to trial in September.

The Justice Department did not immediately respond to a Reuters request for comment, while Google declined to comment on the report.

The lawsuit is expected to take an aim at Google’s advertising business, which is responsible for almost 80 per cent of its revenue. In addition to its well-known search, which is free, Google makes revenue through its interlocking ad tech businesses, which connect advertisers with newspapers, websites and other firms looking to host them.

Advertisers and website publishers have complained that Google has not been transparent about where ad dollars go, specifically how much goes to publishers and how much to Google.

The tech giant made a series of purchases, including DoubleClick in 2008 and AdMob in 2009, to help make it a dominant player in online advertising.

Google had previously argued that the ad tech ecosystem was competitive with Facebook, AT&T, Comcast and others.

While Google remains the market leader by a long shot, its share of the US digital ad revenue has been eroding, falling from 36.7 per cent in 2016 to 28.8 per cent last year, according to Insider Intelligence.

Pichai to staff: Cuts avoided ‘much worse’ issues

Google’s chief executive officer told employees on Monday that job cuts were made in a bid to act decisively as the company’s growth slowed.

“If you don’t act clearly and decisively and early, we can compound the problem and make it much worse,” Pichai said. 

“These are decisions I needed to make...the process was far from random,” he said. 

In an internal meeting, Sundar Pichai, CEO of Google parent Alphabet , said he had consulted with the company’s founders and board in making the decision for 6 per cent cuts. Bloomberg