Google: clouds on the horizon…

In what seems like a strong slap against the technology giant Google, the United States Department of Justice and eight states of the American union, filed a massive lawsuit against the company on Tuesday. This fifth lawsuit, in less than two years, accuses Google of illegally abusing a monopoly over the technology that powers online advertising.

According to a story published Tuesday in the NYT, Google had “corrupted legitimate competition in the ad-tech industry by engaging in a systematic campaign to seize control of the wide range of high-tech tools used by publishers, advertisers and brokers to facilitate digital advertising. The lawsuit asked the United States District Court for the Eastern District of Virginia to compel Google to sell its suite of ad-tech products and prevent the company from engaging in allegedly anti-competitive practices.

This new demand is understood as an effort by the Biden administration to control the excessive growth of monopolistic companies. But it also adds to an international regulatory effort to reduce the damage that this type of monopolies have generated in various ecosystems.

Already in 2020, several states of the American union, together with the Department of Justice, had filed an antitrust lawsuit against him related to advertising technology. Later in 2021, some states also sued for what they called abusive practices by Google in the app store.

According to the same note from New York Times, a group representing publishers including The New York Times Company, has lobbied Congress to allow sites to collectively negotiate the terms of advertising deals with Google and other online platforms. Normally, that kind of coordination would be illegal under antitrust laws. However, the efforts of the publishers have not yielded the desired results so far.

Finally, the Justice Department’s argument advocates what in principle must be veiled and regulated, which is the balance of the market that protects consumers from abuse. In the same way, these regulatory bodies must protect other small interest groups, such as publishers, who are left helpless to grow before giants of this size.

Separately, perhaps forecasting clouds on the horizon, on Friday Google announced it would lay off 12,000 employees, or 6% of its workforce, in response to a slowdown in the digital advertising market. Already last week Microsoft had also announced the layoff of about 10,000 employees.