US sues Google in bid to smash ad dominance
GOOGLE is being sued by the US government, which wants to break up the company’s core advertising business.
Unveiled last night, the US government lawsuit alleges Google abuses its dominance of the £488bn (£396bn) global online advertising industry.
“Google has used anticompetitive, exclusionary and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” said the 149page complaint, filed by the justice department in a court in Virginia.
Lisa Monaco, deputy US attorney general, said: “In pursuit of outsized profits, Google has caused great harm to online publishers and advertisers and American consumers.”
Google has faced repeated accusations for years that its sheer size, at $1.27 trillion, means it can exert undue influence on global digital advertising markets.
A Google spokesman responded to the lawsuit by saying the US government was “doubling down on a flawed argument that would slow innovation, raise advertising fees and make it harder for thousands of small businesses and publishers to grow”.
Google’s online advertising business accounts for about 80pc of its total income. Those digital ads are mostly displayed on its search engine as well as its Youtube video streaming website.
The lawsuit is the first to explicitly seek a break-up of Google and will draw comparisons with the EU’S pursuit of Microsoft under the bloc’s competition laws in the 2000s.
Britain’s Competition and Markets Authority is among other global regulators with active investigations into the company’s business practices. UK regulators are investigating whether Google, together with Apple, are distorting competition in internet browsers.
The lawsuit will run in parallel with a 2020 competition lawsuit brought against Google by Donald Trump’s administration. That case also alleged abuse of market dominance.
Separately last night, Microsoft shares spiked 5pc in after-hours trading after it reported quarterly sales that beat market expectations.
Total revenue for the three months to Dec 31 was up 2pc on the same period in 2021, while profits dipped to $16.4bn from $18.8bn. Last week the company said it would make 10,000 redundancies, costing $1.2bn to implement.
Personal Computing, the business unit that contains Windows, Xbox gaming and Bing search adverts, shrank 19pc compared with last year. “We are focused on operational excellence as we continue to invest to drive growth,” said Amy Hood, Microsoft’s finance chief.