Google cuts online ad spend by up to 42%, lawsuit reveals

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Google takes between 22% and 42% of all online ad spend they facilitate on behalf of advertisers and publishers – up to four times more than rivals, an uncensored new lawsuit reveals.

The bomb’s legal deposit, unsealed in U.S. District Court for the Southern District of New York on Friday, sheds new light on the extent of the company’s stronghold dominance over advertisements.

‘[T]The analogy would be if Goldman or Citibank owned the NYSE [New York Stock Exchange]’said a senior Google official, according to the lawsuit.

The disclosure of the content of the lawsuit comes as attorneys general in 16 states, led by Texas, and a series of companies accuse Google of using its stranglehold on search engine marketing and the buying, selling and marketing. dissemination of online advertisements to increase the profits of itself.

In this amended, unredacted version of the lawsuit, states claim that Google has taken steps to “lock down” advertisers and publishers, leaving businesses only to use Google’s own advertising services as the technology controls the dominant tool for placing ads. online and manages the main platform that connects consumers and sellers.

In a sample search included in the lawsuit, a query for “plumbers in Denver” shows how a Google ad is prominently displayed on search and the organic result is “well below the fold”

Google generates hundreds of billions of dollars in revenue per year by selling advertisements that appear with its search results, in addition to advertisements that appear on websites.

And as the primary gateway for users who surf the web, the lawsuit alleges that Google has completely – and on purpose – limited the ability of other companies to reach consumers.

The lawsuit further alleges that the company used its monopoly for its own benefit, while simultaneously harming consumers, advertisers, publishers and the free market.

“Google, moreover, cannot establish sufficient business justifications or pro-competitive advantages to justify its exclusionary behavior in a relevant market,” the lawsuit said.

The lawsuit also adds that by paying billions of dollars a year to companies like Apple, as well as web browsers and mobile operators, the company is successful in capturing and maintaining a stranglehold on major distribution channels.

The lawsuit explains that the company’s monopoly in the market stems from its overwhelming influence over Internet searches: 90% of Internet searches in the United States use Google.

“This presentation increases the importance of paid placements, especially on mobile devices with much smaller screens,” the combination says. Figure 2 of the folder shows the following search pages when a mobile user scrolls down, noting that there are no organic results

This describes the relationship between how specialty verticals advertise to attract consumers, which includes

This describes the relationship between how specialist verticals advertise to attract consumers, which includes “going directly to their sites and bypassing general search, through search engines other than Google and through new forms of discovery “, according to the prosecution

The investigation is the latest challenge for big tech companies, which are under fire from federal and state antitrust authorities, as well as Congress, for wondering if a handful of huge companies have too much power and are using it to stifle illegally compete. and harm consumers.

Google takes a 22-42% reduction on advertising transactions in the website’s marketplace compared to its competitors, the lawsuit said.

The company is also making sure it wins 80% of auctions hosted on its own exchange, while serving 75% of all online ad impressions in the United States in the third quarter of 2018, according to the lawsuit.

The contents of the dossier also reveal the stark differences between what Google says publicly and what the company admits to be true and says behind closed doors.

“Google concedes that an electronic exchange like its normally should not be able to extract such high fees from the market,” the document said.

He then notes that Google executives even acknowledged that “an exchange should not be a hugely profitable business” during the federal investigation, which has been going on for two years.

The lawsuit further reveals that “when rival exchanges attempted to gain market share by lowering their prices in 2017, Google’s stock exchange maintained or even increased prices” – and still managed to strengthen its own position in the world. top of the market. ‘

The file then adds: “Competing exchanges have not been able to significantly increase their market share”, due to Google’s monopoly on online advertising space – even with competitors “cutting their rates. participation of half “.

The case claims to have uncovered internal memos in which Google would have wanted to discuss “competition” and “ways of working together” with other tech giants.

One quote mentions their goal of “collaborating where necessary to maintain the status quo”.

Texas Republican Attorney General Ken Paxton initially filed a complaint in December 2020, with much of the complaint redacted, after Google argued that parts of the complaint contained information about confidential business matters that would harm the business if made public.

Friday’s unredacted case comes after a federal judge ruled last week that the sprawling antitrust lawsuit could be unsealed.

A total of 48 states are part of the Alphabet Inc. subsidiary’s surveys, as well as the District of Columbia and Puerto Rico.

Google’s alleged monopoly has highlighted troubling concerns for businesses and consumers, according to a bipartisan group of attorneys general representing nearly every state that launched an antitrust investigation into the search giant on Monday.

Google disputed the charges and called the lawsuit flawed, saying it was charging below industry average ad fees.

“Google’s services are helping people, creating more choice and supporting thousands of jobs and small businesses across the United States,” said Kent Walker, senior vice president of corporate global affairs, in a blog post last week.


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