Google’s Ad Market Subject Of Upcoming Antitrust Suit. Again.

According to Bloomberg, the U.S. Department of Justice could sue Alphabet, Inc, the search engine’s parent company, for antitrust violations as early as next month. 

Google Repeatedly Targeted by Antitrust Allegations

In October 2020, the federal department of justice filed a lawsuit against the search engine giant, which currently accounts for an 83.84% of the global market. This suit, which was filed under the Trump administration, alleges Google’s online advertising dominance constitutes an illegal monopoly.

In December of the same year, attorneys general for 16 states and Puerto Rico also sued Google for state-level violations of antitrust laws. Both these suits are currently unsettled.

Alphabet, Inc. has also faced antitrust allegations and charges internationally, including three in the European Union, in which it was fined $1.6 billion. In response to ongoing challenges from European legislators, last month Google proposed splitting its business.

Google has denied all allegations, insisting that its technologies are vital to helping websites, apps and small businesses reach customers.

“The enormous competition in online advertising has made online ads more relevant, reduced ad tech fees, and expanded options for publishers and advertisers,” Google spokesperson Peter Schottenfels said in a statement.

Suit Could Change How Digital Ads Work

Though it is far too early to speculate about the outcome of this legal action, the continued scrutiny under which Google finds itself suggests a change to digital advertising may be on the horizon.

Google Ads currently works on model, where marketers bid on specific keywords. This is then paired with a score of your ad and landing page known as a “quality score.” Higher quality ads can secure placement, even when they are outbid on a keyword.

Google currently participates in each step of the ad placement process, which combined with its massive share of the search market has given the company according to its detractors.

If Alphabet, Inc. is forced to divest one or multiple processes in the bid-placement-conversion, it could lead to significant changes to the online advertising model.

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