Why DOJ’s Antitrust Suit Against Google’s Digital Ad Business Misses the Mark
The Department of Justice (DOJ) filed a lawsuit against Google today, a division of parent company Alphabet, alleging the company has a monopoly over digital advertising on the internet. The DOJ lawsuit was filed in Virginia and early reports say the agency is joined by states, including Virginia, New York, Colorado and California.
Director of CEI’s Center for Technology and Innovation Jessica Melugin said:
“The DOJ is from the government and they’re here to help… with something that the market is already addressing.
“Google owner Alphabet’s digital ad sales missed analysts’ estimates for three quarters in a row and, for the first time since 2015, their combined market share with Meta dipped below 50% last year. Projections are for continued loss of market share in 2023 thanks to booming new ad types that appear on streaming TV platforms and e-commerce sites like Amazon.com, Target and Walmart.
“This is a competitive sector that’s moving quicker than politically-motivated antitrust regulators.”
CEI Senior Economist Ryan Young said:
“In an antitrust case, it is not enough to say that a company has a monopoly. One must also answer, a monopoly over what? That’s where this case stumbles.
“Online ad sales are clearly competitive, with falling prices, rising volumes, and new competitors like TikTok eating away at Google and Meta’s leading market shares.
“That’s why Justice Department lawyers have created brand new market definitions that are much narrower, such as ‘publisher ad servers,’ ‘ad exchanges for indirect open web display advertising,’ and ‘advertiser ad networks.’
“Such creativity is admirable in poetry or literature, but not so much in courts of law, where judges tend to prefer realism.
“The Justice Department’s wordplay is evidence of a weak case, not a monopoly. It should withdraw its lawsuit and spare overburdened courts from its ideological theater.”
- Melugin: U.S. Antitrust’s Greatest Misses