DOJ Antitrust Suit Seeks To End Google Ad Dominance. The Market Is Already Taking Care of That.

The U.S. Department of Justice (DOJ) has filed another civil antitrust suit against Google. This one accuses the company of maintaining an illegal monopoly on various aspects of digital advertising tech. And like so much federal antitrust action against tech companies, it comes at a time when the market is already challenging Google’s dominance.

DOJ’s previous antitrust complaint, filed in 2020, was concerned with Google’s search and search advertising businesses, largely objecting to deals made by Google’s parent company, Alphabet, to have its apps and search engine preset as the default on some browsers and devices. That suit—filed in conjunction with 11 states—is still ongoing.

The new suit, filed in conjunction with eight states—California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia—seems to offer up more of the same spin: Google is big, Google is very successful, and therefore Google must be doing something bad to maintain this status.

It seeks to make Google get rid of its Google Ad Manager suite, which includes a publisher ad server, Doubleclick for Publishers, and the ad exchange, AdX.

Funny timing: The federal government doesn’t have a great track record when it comes to antitrust claims against tech companies, largely because it is reactionary and unimaginative. It looks at the current landscape, sees which companies are dominant, and assumes that without government intervention, things will always be thus. But tech is a dynamic field, with new—and hard to predict—products and services constantly disrupting the old behemoths. By the time a company becomes big enough that government regulators want to topple it, it’s likely that it’s already being threatened by market forces.

This was the case when the government went after Microsoft in the 1990s. The government was upset about the dominance of Microsoft’s operating system (Windows) and browser (Internet Explorer). But by the time the suit started winding its way through the courts, Microsoft was facing increasing competition from Apple computers and, not long after, from smartphones. “Smartphones supplemented and replaced desktop and laptop computers; social media and messaging apps gained on email; and Apple’s iPhone, Google’s Android operating system, and platforms such as Facebook and Twitter began to dethrone Microsoft,” I noted in this 2021 feature on the bipartisan antitrust crusade against tech companies.

In recent years, authorities have been obsessed with toppling Facebook, saying that it holds an unfair monopoly on social media services and its dominance prevents any new players from becoming successful. The government has been launching this legal crusade against Facebook as the company started shedding U.S. users and TikTok rose as a massive competitor to Facebook and Instagram, which are both owned by Meta.

The new DOJ suit against Google comes at a time when the company’s ad share is shrinking and it faces increasing ad services competition from a host of major players. Earlier this month, a Wall Street Journal headline put it succinctly: “Google and Meta’s Advertising Dominance Fades as TikTok, Streamers Emerge.”

Their timing is seriously uncanny…. pic.twitter.com/7sJ0LNI4Eo

— Scott Lincicome (@scottlincicome) January 24, 2023

“Google owner Alphabet’s digital ad sales missed analysts’ estimates for three quarters in a row and, for the first time since 2015, their combined market share with Meta dipped below 50% last year,” notes Jessica Melugin, director of the Center for Technology and Innovation at the Competitive Enterprise Institute (CEI). “Projections are for continued loss of market share in 2023 thanks to booming new ad types that appear on streaming TV platforms and e-commerce sites like Amazon.com, Target and Walmart. This is a competitive sector that’s moving quicker than politically-motivated antitrust regulators.”

The suit also comes as Google is feeling its search business threatened by the rise of ChatGPT and artificial intelligence tech. “For more than 20 years, the Google search engine has served as the world’s primary gateway to the internet. But with a new kind of chat bot technology poised to reinvent or even replace traditional search engines, Google could face the first serious threat to its main search business,” notes The New York Times. “One Google executive described the efforts as make or break for Google’s future.”

What DOJ is saying: In a press release, DOJ accuses Google of monopolizing “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.”

“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 Garland.

DOJ accuses Google of acquiring competitors, requiring publishers who want “effective real-time access” to Google’s ad exchange to use Google’s publisher ad server, and “limiting real-time bidding on publisher inventory to its ad exchange.”

Google’s response: “Today’s lawsuit from the Department of Justice attempts to pick winners and losers in the highly competitive advertising technology sector,” writes Dan Taylor, Google’s vice president of global ads, in a blog post.

It largely duplicates an unfounded lawsuit by the Texas Attorney General, much of which was recently dismissed by a