U.S. sues Google over digital ad dominance, eight states join

WASHINGTON, Jan 24 (Reuters) – The U.S. Justice Department filed a lawsuit against Alphabet Inc’s (GOOGL.O ) Google on Tuesday, accusing the company of abusing its dominance in the digital advertising business, a court filing showed.

“Google used anticompetitive, exclusionary, and illegal means to eliminate or substantially reduce any threat to its dominance in digital advertising technology,” the government said in its antitrust complaint.

The Justice Department is asking the court to force Google to spin off its Google Ads Manager suite, including its ad exchange AdX.

Google did not immediately respond to a request for comment.

The lawsuit is the second federal antitrust lawsuit filed against Google, alleging that the company violated antitrust laws in obtaining or maintaining its dominant position. The Justice Department’s 2020 case against Google focuses on its monopoly in search and is scheduled to go to trial in September.

Eight states joined the division in the lawsuit filed Tuesday, including Google’s home state of California.

Google shares fell 1.3 percent on the news.

“Google has prevented meaningful competition and innovation in the digital advertising industry, reaped excess competitive profits for itself, and prevented the free market from operating fairly in favor of the interests of the advertisers and publishers who make today’s powerful Internet become possible.”

While Google still leads the market by a wide margin, its share of U.S. digital ad revenue has been declining, from 36.7 percent in 2016 to 28.8 percent last year, according to Insider Intelligence. Google’s advertising business accounts for about 80% of its revenue.

Reporting by Diane Bartz and David Shepardson; Editing by Grant McCool

Our Standards: The Thomson Reuters Trust Principles.

Diane Butts

Thomson Reuters

Focused on U.S. antitrust and corporate regulation and legislation, with experience covering the Bosnian War, elections in Mexico and Nicaragua, and Brazil, Chile, Cuba, El Salvador, Nigeria, and Peru.

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