Filed in the U.S. District Court for the Eastern District of Virginia, the complaint alleges that Google monopolizes key digital advertising technologies, collectively referred to as the “ad tech stack,” that website publishers depend on to sell ads and that advertisers rely on to buy ads and reach potential customers. Website publishers use ad tech tools to generate advertising revenue that supports the creation and maintenance of a vibrant open web, providing the public with unprecedented access to ideas, artistic expression, information, goods, and services. Through this monopolization lawsuit, the Justice Department and state Attorneys General seek to restore competition in these important markets and obtain equitable and monetary relief on behalf of the American public.
As alleged in the complaint, over the past 15 years, Google has engaged in a course of anticompetitive and exclusionary conduct that consisted of neutralizing or eliminating ad tech competitors through acquisitions; wielding its dominance across digital advertising markets to force more publishers and advertisers to use its products; and thwarting the ability to use competing products. In doing so, Google cemented its dominance in tools relied on by website publishers and online advertisers, as well as the digital advertising exchange that runs ad auctions.
“Today’s complaint alleges that Google has used anticompetitive, exclusionary, and unlawful conduct to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” said Attorney General Merrick B. Garland. “No matter the industry and no matter the company, the Justice Department will vigorously enforce our antitrust laws to protect consumers, safeguard competition, and ensure economic fairness and opportunity for all.”
“The complaint filed today alleges a pervasive and systemic pattern of misconduct through which Google sought to consolidate market power and stave off free-market competition,” said Deputy Attorney General Lisa O. Monaco. “In pursuit of outsized profits, Google has caused great harm to online publishers and advertisers and American consumers. This lawsuit marks an important milestone in the Department’s efforts to hold big technology companies accountable for violations of the antitrust laws.”
“The Department’s landmark action against Google underscores our commitment to fighting the abuse of market power,” said Associate Attorney General Vanita Gupta. “We allege that Google has captured publishers’ revenue for its own profits and punished publishers who sought out alternatives. Those actions have weakened the free and open internet and increased advertising costs for businesses and for the United States government, including for our military.”
“Today’s lawsuit seeks to hold Google to account for its longstanding monopolies in digital advertising technologies that content creators use to sell ads and advertisers use to buy ads on the open internet,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Our complaint sets forth detailed allegations explaining how Google engaged in 15 years of sustained conduct that had — and continues to have — the effect of driving out rivals, diminishing competition, inflating advertising costs, reducing revenues for news publishers and content creators, snuffing out innovation, and harming the exchange of information and ideas in the public sphere.”
Google now controls the digital tool that nearly every major website publisher uses to sell ads on their websites (publisher ad server); it controls the dominant advertiser tool that helps millions of large and small advertisers buy ad inventory (advertiser ad network); and it controls the largest advertising exchange (ad exchange), a technology that runs real-time auctions to match buyers and sellers of online advertising.
Google’s anticompetitive conduct has included:
- Acquiring Competitors: Engaging in a pattern of acquisitions to obtain control over key digital advertising tools used by website publishers to sell advertising space;
- Forcing Adoption of Google’s Tools: Locking in website publishers to its newly-acquired tools by restricting its unique, must-have advertiser demand to its ad exchange, and in turn, conditioning effective real-time access to its ad exchange on the use of its publisher ad server;
- Distorting Auction Competition: Limiting real-time bidding on publisher inventory to its ad exchange, and impeding rival ad exchanges’ ability to compete on the same terms as Google’s ad exchange; and
- Auction Manipulation: Manipulating auction mechanics across several of its products to insulate Google from competition, deprive rivals of scale, and halt the rise of rival technologies.
As a result of its illegal monopoly, and by its own estimates, Google pockets on average more than 30% of the advertising dollars that flow through its digital advertising technology products; for some transactions and for certain publishers and advertisers, it takes far more. Google’s anticompetitive conduct has suppressed alternative technologies, hindering their adoption by publishers, advertisers, and rivals.
The Sherman Act embodies America’s enduring commitment to the competitive process and economic liberty. For over a century, the Department has enforced the antitrust laws against unlawful monopolists to unfetter markets and restore competition. To redress Google’s anticompetitive conduct, the Department seeks both equitable relief on behalf of the American public as well as treble damages for losses sustained by federal government agencies that overpaid for web display advertising. This enforcement action marks the first monopolization case in approximately half a century in which the Department has sought damages for a civil antitrust violation.
In 2020, the Justice Department filed a civil antitrust suit against Google for monopolizing search and search advertising, which are different markets from the digital advertising technology markets at issue in the lawsuit filed today. The Google search litigation is scheduled for trial in September 2023.
Google is a limited liability company organized and existing under the laws of the State of Delaware, with a headquarters in Mountain View, California. Google’s global network business generated approximately $31.7 billion in revenues in 2021. Google is owned by Alphabet Inc., a publicly traded company incorporated and existing under the laws of the State of Delaware and headquartered in Mountain View, California.
Text of speech delivered by Attorney General Merrick B. Garland regarding the lawsuit against Google for monopolizing digital asset technologies
Unfortunately, I am going to begin my remarks today just as I did yesterday: offering my condolences to the families of the victims of yet another mass shooting in our country.
All of us at the Justice Department, including the FBI and ATF, will continue to support the Half Moon Bay community in the difficult days ahead. And as I said yesterday, the Justice Department is committed to doing everything in our power to protect our communities from the gun violence that is leaving no community in this country untouched.
Today, the Department of Justice, joined by eight states, filed a civil antitrust lawsuit in the U.S. District Court for the Eastern District of Virginia against Google.
We allege that Google has used anticompetitive, exclusionary, and unlawful conduct to eliminate or severely diminish any threat to its dominance over digital advertising technologies.
These technologies, which are known as “ad tech,” automate advertising sales by website publishers to online advertisers.
When an internet user opens a webpage that has ad space to sell, ad tech tools almost instantly match the website publisher with an advertiser looking to promote its products or services to the website’s user.
This product and process typically involves the use of an automated advertising exchange. This exchange runs a high-speed auction designed to identify the best match between a publisher selling internet ad space and advertisers looking to buy it.
As alleged in our complaint, for 15 years, Google has pursued a course of anticompetitive conduct that has allowed it to halt the rise of rival technologies, manipulate auction mechanics to insulate itself from competition, and force advertisers and publishers to use its tools.
In so doing, Google has engaged in exclusionary conduct to severely weaken, if not destroy, competition in the ad tech industry.
As detailed in our complaint, we allege that Google’s anticompetitive conduct extends to three significant elements of the digital ad buying process.
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.
As a result of this scheme, website creators earn less, and advertisers pay more. That means fewer publishers are able to offer internet users content without subscriptions, paywalls, or other forms of monetization.
Our complaint alleges that Google has violated Section 2 of the Sherman Antitrust Act by:
Monopolizing the market for the technology used by publishers to offer ads on their websites;
Monopolizing or attempting to monopolize the ad exchange market; and
Monopolizing the market for the ad network technology advertisers use to buy digital advertising space.
Our complaint also alleges that Google has unlawfully tied its ad exchange and its publisher ad server, in violation of Sections 1 and 2 of the Sherman Act. And finally, we allege that the United States, as an advertiser, has incurred damages by reason of Google’s violations of the antitrust laws.
In addition to declaratory relief, our complaint seeks damages and the divestiture of certain Google ad tech products. It also seeks an injunction preventing Google from continuing to engage in the anticompetitive practices described in the complaint, and any other practices with the same purpose and effect as the challenged practices.
I am grateful to Assistant Attorney General Jonathan Kanter, Principal Deputy Assistant Attorney General Doha Mekki, and the attorneys and staff of the Antitrust Division for their tireless work on this case.
Monopolies threaten the free and fair markets upon which our economy is based. They stifle innovation, they hurt producers and workers, and they increase costs for consumers.
Today’s complaint is only the latest example of the Department’s work to challenge antitrust violations that undermine competition and harm the American people.
No matter the industry and no matter the company, the Justice Department will vigorously enforce our antitrust laws. We will aggressively protect consumers, safeguard competition, and work to ensure economic fairness and opportunity for all.
I will now turn the podium over to Associate Attorney General Vanita Gupta.
Complete text of speech delivered by Associate Attorney General Vanita Gupta regarding the lawsuit against Google for monopolizing digital asset technologies
I want to reiterate the Attorney General’s thanks to the leadership and staff of the Antitrust Division for all their work to advance robust competition and to ensure that the American people have equal opportunity in the marketplace.
I’d like to take a few moments to put this complaint into context.
At its core, antitrust is about economic justice. And today’s landmark action against Google underscores that it is a priority of this Justice Department to fight the abuse of market power. We know that free and fair competition is essential to economic freedom. And we know that anticompetitive conduct threatens innovation, weakens workers’ rights, and stifles free expression. When any company, including a big technology company, violates the antitrust laws, our economy and our democracy suffer.
Today’s complaint is a perfect example of why competition matters. Americans rely on the internet for news and for community. And advertising revenue is essential for publishers to produce and share ideas and writings. But we allege that Google has captured that revenue for its own profits and punished publishers who sought out alternatives. Those actions have weakened the free and open internet and increased advertising costs for businesses and for the United States government, including for our military.
Today’s complaint is also just one example of the department’s broader efforts to root out anticompetitive behavior regardless of how and where it might arise.
Just a few months ago, the Antitrust Division scored a critical win for authors by blocking a merger of two major publishing houses, Penguin Random House and Simon & Schuster. The merger would have substantially lessened authors’ compensation for their work and diminished opportunities for new authors to tell new stories.
That merger was one of five that have been blocked or abandoned as a result of the division’s recent work; other abandoned mergers include two that would have strained the global supply chain by decreasing competition for shipping materials.
And the Penguin Random House case is just one example of the department’s efforts to protect workers. This past summer, we secured an $85 million payment from poultry companies to settle allegations that they fixed workers’ wages and benefits.
We have also reinvigorated criminal enforcement of the Sherman Act, including prosecutions for criminal wage-fixing, labor-market allocation, bid-rigging, and procurement fraud.
And we have acted to ensure that corporate directors do not sit on competing boards, reviving a vital and underenforced rule of antitrust law.
These efforts by the Antitrust Division are only a snapshot of the broader work happening across the department to advance economic justice, protect workers’ rights and ensure fair prices for products we use and rely on, like health insurance, airline tickets and food for our families. Today’s suit against Google exemplifies that we will continue to marshal our resources across divisions to promote competition and protect American workers and consumers.
I’ll now turn it over to Assistant Attorney General Jonathan Kanter, who will speak more about the details of our complaint.
Text of speech delivered by Assistant Attorney General Jonathan Kanter regarding the lawsuit against Google for monopolizing digital asset technologies
Thank you, Attorney General Garland and Associate Attorney General Gupta.
As alleged in our complaint, in late 2016, a Google digital advertising executive asked the following question in an internal email exchange: “[I]s there a deeper issue with us owning the platform, the exchange, and a huge network? The analogy would be if Goldman or Citibank owned the [New York Stock Exchange]?”
The answer to Google’s rhetorical question is: yes. Indeed, there is a deeper issue: and that issue is the Sherman Antitrust Act. Google’s alleged misconduct amounts to numerous violations of the United States’ antitrust laws. And that is precisely why we are here today.
The lawsuit we have filed today seeks to hold Google to account for what we allege are its longstanding monopolies in digital advertising technologies that content creators use to sell ads and advertisers use to buy ads on the open internet.
In the complaint, the Department alleges that Google engaged in 15 years of sustained conduct that had — and continues to have — the effect of: driving out rivals, diminishing competition, inflating advertising costs, reducing website publisher revenues, stymieing innovation, and flattening our public marketplace of ideas.
The complaint filed today alleges that Google engaged in a pattern of acquisitions to obtain market dominance and – once it had obtained that dominance – a series of exclusionary acts to expand and entrench its monopoly power.
Here are just five examples:
locking in content creators through tying arrangements;
manipulating auctions, including by giving itself a “first look” and then “last look” advantage over competing ad exchanges;
blocking industry participants from using rivals’ technologies and punishing those that tried;
amassing and abusing troves of its rivals’ bidding data; and
depriving customers of choice by degrading the quality of Google’s own.
Because Google dominates every part of the ad tech industry, it has the power to impose a surcharge on display advertising transactions, an industry where billions of dollars are transacted via instantaneous auctions each year in the United States.
Google’s own documents estimate it keeps on average at least 30 cents of each advertising dollar that flows through Google’s ad-tech tools. For some transactions, and for certain customers, Google keeps significantly more.
In addition to the harm Google inflicts on content creators and online advertisers, the lawsuit alleges that Google’s conduct has also harmed the United States Government, including the United States Army.
Google’s alleged anticompetitive conduct over the last 15 years is perhaps best explained through the words of Google’s own employees and documents, which are quoted extensively in the Department’s complaint.
Here are just five examples:
A Google employee characterized Google’s ad exchange as an “authoritarian intermediary.”
A senior Google executive conceded that switching ad servers for publishers is a “nightmare” that “[t]akes an act of God.”
A Google employee described the company’s scheme to pay publishers “$3 [billion] yearly” by restricting access to Google Ads and “overcharging its advertisers.”
A Google manager made clear that: “[o]ur goal should be all or nothing – use [Google’s ad exchange] or don’t get access to our [advertiser] demand.”
A Google executive detailed the company’s steps to “dry out” rivals.
For more than two centuries, advertising in this country has funded newspapers and other avenues of free expression. Revenue from advertising has provided critical support for content creation, the sharing of information, and the exchange of viewpoints, which promote a vibrant, free, and healthy society.
The Antitrust Division – and I am so proud of this – has a storied history of safeguarding competition in offline media, from music to broadcasting to publishing. It is now just as important — if not more — to protect competition in the digital marketplace of ideas, where powerful network effects make monopoly power even more durable and harmful, and the abuses by companies with monopoly power like Google even more pernicious.
In closing, I would like to thank the unbelievably hardworking, dedicated, talented, and extremely awesome staff of the Antitrust Division whose tireless efforts to untangle the complex web of Google’s alleged conduct resulted in today’s filing.
I am also deeply pleased to thank the Attorneys General of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and the Commonwealth of Virginia, and their extremely talented staff – we’ve enjoyed an excellent and constructive working relationship with our partner State Attorneys General. I would also like to thank the U.S. Attorney’s Office of the Eastern District of Virginia for joining us in filing this important and historic case.
Official Justice Department filing against Google for monopolizing digital assets
You can view the entire Google complaint below.