DoJ to sue Google in fall for 'illegally dominating digital ad market'

Justice Department is set to file ANOTHER antitrust lawsuit against Google as soon as next month for illegally dominating the digital advertising market

• Investigators have for years been looking into Google’s monopoly on internet access and domination of the online advertising sphere
• Now the Department of Justice is readying to sue the California-based company, Bloomberg reported on Tuesday, with a case likely filed in September
• Prosecutors are yet to decide whether to file the case in Washington DC or in NYC, where state attorneys general have their own antitrust case related
• Google has already been sued for allegedly dominating the online search market: the case, filed in December 2020, will have its latest hearing this month
• Google spokesperson Peter Schottenfels defended ‘the enormous competition’ for digital adverts and said Google supported small businesses

Federal prosecutors are in the final stages of preparing an antitrust case against Google, according to a report, and aiming to file their case in September.

The Justice Department has been investigating the tech giant for several years.

In 2020 Google was sued both federally and by a coalition of state attorney generals for monopolizing the digital search market. 

Google denied the charges, and is petitioning the judge to drop the case: a hearing is scheduled for later this month.

On Tuesday, Bloomberg reported that yet another case against Google could be filed next month – this time accusing them of monopolizing digital advertising.

Three sources told Bloomberg that investigators with the Justice Department’s antitrust division are currently questioning online publishers, to finalize the details for the complaint.

The interviews are follow-ups to previous discussions, the sources said. 

Google’s headquarters are pictured in Mountain View, California. The company could be facing yet another antitrust lawsuit

Sundar Pichai, the CEO of Google – whose company relies heavily on adverts for its revenue

They said it is unclear whether the case will be filed in Washington DC or in New York City, where other cases against Google are being held.

Google’s spokesman said it was wrong to say the company had a monopoly, and pointed to ‘enormous competition in online advertising’.

Peter Schottenfels also said that Google supported small businesses.

‘Our advertising technologies help websites and apps fund their content, and enable small businesses to reach customers around the world,’ said Schottenfels. 

‘The enormous competition in online advertising has made online ads more relevant, reduced ad tech fees, and expanded options for publishers and advertisers.’

Merrick Garland, the attorney general, is pictured on August 2. The DoJ has been investigating Google for several years

Google’s ads are vital to the company’s bottom line.

On July 26, Google’s latest financial report showed that search ads lifted parent Alphabet Inc close to Wall Street sales expectations, sending shares up on relief that the world’s biggest seller of online advertising may withstand a global recession better than smaller rivals.

A trio of Alphabet executives sounded caution on a call with investment analysts, using ‘uncertain’ or ‘uncertainty’ at least 13 times to describe the economy. YouTube ad sales grew at their slowest pace since disclosures began in 2018.

But investors focused elsewhere, notably on the fact that second-quarter sales from the company’s biggest moneymaker – Google search – actually topped expectations. 

Shares of Alphabet jumped 5.5% in after-hours trading following the results.

‘Despite the underwhelming quarter, expectations were so low that investors blew a sigh of relief,’ said Jesse Cohen, senior analyst at Investing.com.

By contrast, shares of Snap Inc fell more than 25% last week after the company missed sales expectations and warned of an ad market slowdown.

Alphabet executives said Google was not immune to the pullback, which has been brought on by clients facing product shortages, less demand and a variety of other factors. 

Rising wages as well as rising prices of fuel and other items also have forced some ad buyers this year to pare marketing.

But Google has weathered storms better than social media companies. It brings in revenue through a greater variety of functions in the ad market, and search ads can be less expensive for customers to generate since they often include just text.

Clients sometimes prioritize search ads because the marketing is typically directed at people actively searching for related items, yielding better returns.

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