Google remains embroiled in antitrust lawsuits related to its business models. Its ad-related technologies have been at the center of several legal battles. Now, Google is about to face a similar antitrust case, this time related to its purchase of DoubleClick.
Google faces antitrust lawsuit over DoubleClick acquisition
In 2008, Google successfully acquired DoubleClick, an ad sales-focused company. The Mountain View giant saw the acquisition as a priority before others could get ahead of it. “A Microsoft-owned DoubleClick represents a major competitive threat,” wrote Google’s then-executive in charge of acquisitions, David Drummond, in an email to executives. Now, more than 16 years later, the deal could lead to sanctions against the company.
Once again, the US DOJ is taking Google to court for alleged monopolistic practices in its ad business. 17 states, including California and Colorado, support the DOJ this time. State authorities believe the Google-DoubleClick deal led to the company’s current dominant position in the segment. The $3.1 billion deal gave Google access to DoubleClick’s technologies and customer base.
The lawsuit alleges that Google’s dominant position following the deal allowed it to set unfair pricing conditions for those interested in using the most popular ad platform. Plus, by controlling the majority of the ad supply chain, there were few options available to those seeking the most effectiveness. This may have led to more aggressive monetization strategies by publishers, authorities say. The deal may have resulted in more frequent and annoying ads as websites sought to make high investments profitable.
Authorities seek better adtech conditions for less annoying ads and online monetization
Colorado Attorney General Phil Weiser says that “Google is able to extract raised-up costs, and those are passed on to consumers.” The plaintiffs also allege that Google’s current pricing schemes push publishers “to put more ads on their websites, to put more content behind costly paywalls, or to cease business altogether.” Ultimately, the lawsuit aims for better pricing conditions for ad plans or more favorable conditions for publishers. This would reduce the aggressive monetization methods that certain publishers have resorted to, such as articles hidden behind paid subscriptions.
The judge overseeing the case in Alexandria, Virginia, will be Leonie Brinkema. As in previous lawsuits, the output could mark the future of the online ad business. In previous cases, the DOJ suggested “breaking up” Google’s business into multiple companies. This way, each would act independently without boosting each other. However, not everyone agrees with this proposal.
Breaking up Google’s business would be detrimental, AdGuard’s co-founder believes
Andrey Meshkov, AdGuard’s CTO and co-founder, suggests that tearing apart Google’s advertising business would lead to a worse web experience. If that happens, he predicts increasingly invasive activity tracking systems. On the other hand, Dina Srinivasan, an antitrust scholar and former ad executive, thinks the Google-DoubleClick antitrust case could benefit everyone. She says it would result in lower ad pricing and a better web experience, even if Google wins.
For its part, Google maintains that its acquisitions have been positive for the market. “Google has designed a set of products that work efficiently with each other and attract a valuable customer base,” the company claims. The trial’s outcome will likely unfold over several months. In the meantime, Google has another ad-related technology antitrust case pending in Texas, set for March 2025.
2024-09-11 15:06:37