Starting Monday, Google is facing another lawsuit from the U.S. Justice Department over its business practices, which could lead to the breakup of its Alphabet subsidiary.
Google is under the radar of U.S. competition regulators. The Internet company is now facing a trial in the coming weeks over its business of placing online advertisements on websites, a major source of revenue for Google. According to the lawsuit, the company dominates this market through a complex web of acquisitions, restrictions on the use of certain software, and manipulation of Internet advertising auctions.
Google has denied the claims. Moreover, when calculating market share, the authorities have overlooked the fact that advertising is increasingly moving to online platforms such as TikTok and streaming services such as Netflix. Alphabet’s subsidiary is under intense competitive pressure there. If Judge Leonie Brinkema supports the lawsuit, she could order the sale of the “Google Ad Manager” platform, which includes, among other things, the ad servers and ad exchanges that provide website operators with advertising space.
“illegal monopoly”
“Ad Manager” contributed 4.1% to consolidated revenue and 1.5% to operating results in 2020, Wedbush analysts calculated based on court documents. The published documents black out figures for subsequent years. About a month ago, another court ruled in a “decade of trial” that Google had an “unlawful monopoly” in online search.
This opens the way for further proceedings that could lead to the breakup of its parent company, Alphabet. In Europe, Google also has to answer in court. In early 2024, dozens of European media companies led by Axel Springer sued for €2.1 billion in damages for anticompetitive practices in online advertising.
