DOJ Sues Alphabet, Again – The U.S. Cracks Down Against Monopolies
More negative news has hit Google this week, as for the second time in 3 years Google’s parent company, Alphabet, has been sued by the U.S. Department of Justice. The meaning of the lawsuit is based upon their belief that Google has a monopolized structure for their advertising business. The DOJ believes that Google acts in an anti-competitive manner to control digital advertising technology, claiming that they diminish the power other publishers and advertisers have outside of their agency. With acquisitions of other ad-serving companies under their belt, several believe that Google intentionally provides more prominence towards their own ad tech products. In doing so, they collect advertising fees and revenue while other advertisers are given disproportionate visibility.
Google is not the only big name that has come under legal fire for potentially monopolizing practices. Apple, Meta, and Microsoft have either recently been under investigation or have had a lawsuit tied to some aspect of their business. In this case, however, Google claims the DOJ raises an argument that “attempts to pick winners and losers”, increased advertising prices and slowing innovation as a result. As the previous antitrust lawsuit is expected to commence in September of this year, Google may have a harder time ahead in maintaining the control they have over its multiple businesses. Regardless, the current antitrust lawsuit has already had eight states that have joined the DOJ’s side, and only time will tell if Google will be forced to divide or able to maintain its dominance over the ad tech space.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.