The US Justice Department is preparing to sue Alphabet Inc.’s (Nasdaq: GOOGL) Google as soon as Tuesday over the search giant’s dominance in the digital advertising market.
The lawsuit will be the Justice Department’s second monopoly case against the company, which controls the majority of the technology used to buy, sell, and serve online advertising in the $278.6 billion US digital-ad market.
According to EMarketer’s 2023 estimates, the California-based company leads the $626.86 billion global digital ad market, with the United States accounting for the lion’s share. In 2023, Alphabet’s ad operations are expected to generate $73.8 billion in US digital ad revenue.
This would be the fifth major case in the United States challenging the company’s business practices. State attorneys general have filed three separate lawsuits against Google, alleging that it violates antitrust laws by dominating the markets for online search, advertising technology, and apps on the Android mobile platform.
Google has argued that the online advertising market is crowded and competitive. In court filings and a congressional testimony, the company has named other major players in the ad tech market as competitors, including Amazon.com, Meta Platforms, and Microsoft.
The department’s investigation into Google’s dominance of the ad tech market dates back to the Trump administration. The DOJ, led by then-Attorney General William Barr, sued Google over its search business, alleging that the company used exclusive distribution deals with wireless carriers and phone manufacturers to keep competitors at bay. The trial in that case is scheduled for September.
The rumored lawsuit comes on the heels of Google’s massive layoffs this month, eliminating 12,000 jobs, or roughly 6% of the full-time workforce.
“I understand you are worried about what comes next for your work,” CEO Sundar Pichai defended the job cuts in a companywide meeting on Monday. “Also very sad for the loss of some really good colleagues across the company. For those of you outside the U.S., the delay in being able to make and communicate decisions about roles in your region is undoubtedly causing anxiety.”
Prior to the layoffs, Google had decided to pay out 80% of bonuses this month, with the remainder due in March or April. Previously, the entire bonus was paid in January.
Alphabet last traded at $99.79 on the Nasdaq.
Information for this briefing was found via Bloomberg, CNBC, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.