Newsletter
When it comes to online advertising, Google is the top choice for most brands, and the company makes tons of money from advertising. Currently, almost 80% of Google’s revenue comes from online ads. Google’s dominance in the market has reportedly instigated the U.S. Justice Department (DOJ) to sue the company over violating antitrust laws.
According to Bloomberg, citing people familiar with the matter, the DOJ might file a lawsuit against Google as soon as Tuesday. This is the second major antitrust lawsuit against Google in less than two years. The previous one was filed in 2020 by the DOJ over the company’s dominance in the online search market. The case will go to trial this September, and Google might have to pay a hefty fine.
The DOJ wants to keep Google in check over its dominance in search and digital advertising
Much of Google’s dominance in digital advertising was due to its purchases in 2008 and 2009 when it acquired DoubleClick and AdMob. Google’s share of the US digital ad market has declined from 36.7% in 2016 to 28.8% last year. However, the Mountain-view-based company is still the leader of the online advertising market by a wide margin.
In addition to showing regular ads on search pages and online platforms like YouTube, Google also earns a lot of money from advertising mediation, meaning connecting advertisers with websites that are open to host ads.
The privacy and antitrust lawsuits against Google are coming in days when it is reportedly preparing for a dire economic situation in years ahead. The company has recently axed 12,000 jobs. Google’s parent company Alphabet is also facing a class-action lawsuit in the UK that might cost around $16.3 billion.
Additionally, Google has faced an emerging but ambitious competitor called ChatGPT that aims to vanish Google’s search business. While Google’s AI department is building a rival for ChatGPT, Microsoft seized the opportunity to invest $10 billion in ChatGPT maker OpenAI.