January 26, 2023
The U.S. Department of Justice wants to break up Google’s highly profitable advertising business, and it wants to do it fast, according to a new complaint that adds to the company’s other battles against four different and overlapping government enforcement actions.
Tuesday’s complaint, joined by a contingent of state attorneys general, is the second DOJ lawsuit after one targeting the company’s alleged monopoly over online search and the ads that accompany search results and is the most concerted effort yet to disassemble the internet giant.
It’s the second government enforcement lawsuit, following one from state attorneys general led by Texas, to accuse Google of anticompetitively amassing control over every facet of the advertising technology, or ad tech, space. And it’s just the latest government action to target various aspects of Google’s business, including a lawsuit going after its control of the Play Store on cellphones that run its Android operating system.
But the latest case also adds important new elements. It’s the first DOJ Big Tech lawsuit filed during the Biden administration. It’s the first to call for more than just vague injunctive relief, instead expressly calling for the breakup of Google’s ad tech business. And it’s the first filed in the Eastern District of Virginia, a jurisdiction known as a rocket docket where the DOJ could be hoping to get to trial much faster than the three years it took to kick off the trial for the DOJ’s October 2020 search monopolization . . .
New Venue, New Speed
A big question will be whether the case will move fast enough for any ultimate remedy to meaningfully affect the fast-moving sector.
The DOJ will be looking to dismantle the ad tech engine not in its usual home turf in D.C. federal court, where it filed the search monopoly case, but nine miles away in Alexandria, Virginia.
Despite being close in terms of distance, there’s a world of difference in the speed of the courts’ dockets.
. . .
Time Is A Weapon
The attrition that accompanies an enforcement campaign may be part of the DOJ’s calculus in pumping the massive resources into the cases against Google, with fanfare that has gone as far as including the participation of Attorney General Merrick Garland in announcing the case that now takes the lead of the pushback against Google, Meta and other Big Tech platforms.
. . .
Antitrust enforcers, McCuaig said, are “taking a hard soup-to-nuts look at Google’s business practices and bringing enforcement actions where they think they’re warranted.”
The Great Google Breakup
Both this case and the Texas-led action that preceded it by more than two years (filed in December 2020) call for injunctive relief. But the DOJ’s lawsuit goes a step further, seeking a long-called-for-remedy as it targets Google’s power controlling the middlemen in the space that pairs advertisers, website publishers and everyday users in high-speed auctions for specific ads to reach specific eyeballs on specific websites. If the DOJ has its way, Google will have to sell off the service that website owners use to manage their advertising space sales and the ad exchange where digital ad space is auctioned off.
. . .
According to McCuaig, the divestiture bid amounts to an effort to unwind Google’s $3 billion 2008 purchase of DoubleClick, a deal the complaint says the FTC at the time permitted to go forward on the mistaken “assumptions” that customers could simply switch to other publisher ad servers, when Google knew at the time that switching was nigh impossible.
. . .
A “do-over” on DoubleClick, McCuaig said, “is a pretty big ask,” one with which he asserted only the DOJ could have a chance to prevail. One challenge, McCuaig and others said, is the age of the DoubleClick deal, with Google likely to argue how difficult, and damaging to the modern internet, it would be to “unscramble the egg.”
“It can just get really hard to unscramble omelets. And typically more so as time goes on,” McCuaig said.
. . .
Searching For More
McCuaig also noted that the complaint suggests that the DOJ may still not be done with Google. In particular, he pointed to a paragraph in which the DOJ spoke of mergers that scooped up mobile app advertising technology.
“While Google’s conduct in the distinct market for mobile app advertising is outside the scope of this complaint, Google’s anticompetitive conduct in the mobile apps market is consistent with the conduct alleged in the market for display advertising,” the complaint states.
“That’s a pretty strong statement about conduct that you’re not challenging,” McCuaig said.
Read the article on Law360.