Breakup looms

New antitrust lawsuit against Google in the USA

According to observers, Google is "by far the largest seller of advertising in the world".

(Bild: AFP)

Following the setback in the "trial of the decade", Google will have to answer for its business practices in court again from next week. The lawsuit revolves around the online advertising business, the Alphabet subsidiary's main source of income, and could result in the company being broken up.

According to the plaintiffs, Google is abusing its market power in the area of software for internet ads by linking its programs for publishers and advertisers. As a result, the group occupies a "privileged position as an intermediary". It controls 91 percent of all advertising servers on which website operators offer advertising space, more than 85 percent of the advertising networks used to distribute ads and more than half of the market for ad exchanges.

 "Google is by far the biggest seller of advertising in the world," said advertising consultant and financial analyst Brian Wieser on Wednesday. "They are ubiquitous in the industry, if not directly, then indirectly."

Google rejects accusations
The company itself sees things differently. According to Google, the market shares mentioned are 30 percent or less if advertising in social networks, streaming services or smartphone apps are included. The US Department of Justice's focus on website ads neglects the fierce competition in the other areas mentioned.

The company also pointed out that it was not obliged to share technological advantages with rivals. Moreover, its products are compatible with those of its competitors. The online advertising programs contributed more than three quarters of the Group's total advertising revenue of around 307 billion dollars last year.

"Journalism under threat"
The court will also examine the impact of Google's dominance on the US publishing landscape. "Journalism is threatened above all by the consolidation of the advertising market," warned Jonathan Kanter, head of the Antitrust Division of the US Department of Justice, at an event in June. According to a study conducted by Northwestern University last November, a third of all US newspapers have been sold or closed since 2005.

Break-up looms
Around a month ago, another court ruled that Google had an "illegal monopoly" in online searches. This paved the way for follow-up proceedings, which could result in the break-up of the parent company Alphabet. Should Google also lose the new trial, the proceedings will probably also enter the so-called remedial phase. Measures to curb market power will be examined there.

Google also has to answer to the courts in Europe. At the beginning of 2024, dozens of European media companies led by Axel Springer sued the company for 2.1 billion euros in damages for anti-competitive behavior in online advertising.