Google receives between 22% to 42% of all online advertising spending they facilitate for publishers and advertisers. This is up to four times more than its competitors, according to a newly unredacted lawsuit.
The bombshell legal filing, unsealed Friday in the U.S. District Court of the Southern District of New York, sheds new light on the scale of just how dominant the company”s stronghold over advertisements really is.
‘[T]The analogy would be if Citibank and Goldman owned NYSE [New York Stock Exchange]According to the lawsuit, a senior Google employee stated that he was’senior’.
The revelation of the contents of the lawsuit comes as the Attorneys General of 16 states, led by Texas, and a string of companies accuse Google of utilizing its stranglehold over search engine marketing and the buying, selling and serving of online advertisements to increase profits for itself.
The suit’s importance pertains to the fact that companies have little choice but to use Google’s ad services, as the company controls the dominant tool for placing ads online and runs the primary platform that links consumers and sellers.
Google generates hundreds, if not billions of dollars in revenue each year by selling ads that appear alongside its search results and ads that appear on other sites.
Google, as the primary portal to users surfing the web, is accused of being a limitation on the ability of other companies and individuals to reach consumers.
Further, the suit states that the company used its monopoly on search-related commerce to benefit it, while simultaneously harming advertisers and consumers.
The suit states that Google cannot prove business justifications or procompetitive advantages sufficient to justify its exclusionary behavior in any relevant market.
The suit adds that Apple has been paying billions of dollar per year to companies such as Apple, web browsers, and cell carriers to ensure it holds key distribution channels.
The company’s dominance in the market is due to its dominance over internet search. Google is used for 90% of all US internet searches.
The latest challenge for major tech firms is the investigation. They are under attack from both federal and State antitrust enforcers as well as Congress over concerns about whether a few large corporations have too much power, and are using it illegally to stifle innovation and harm consumers.
Google receives a cut of between 22-42% for ad transactions on the marketplace website, when compared with competitors, the lawsuit stated.
According to the lawsuit, 75% of all U.S. online ad impressions were served by the company in the third quarter 2018.
The filing also shows the stark differences in what Google claims publicly and what it acknowledges is true behind closed doors.
Google acknowledges that an electronic marketplace such as itss should not normally be in a position to extract such high market fees,’ the document states.
It then noted that Google execs had even acknowledged that “an exchange shouldn’t be an immensely lucrative business” during the federal investigation, which has been ongoing for the past two-years.
Further, the lawsuit reveals that Google’s exchange was able to maintain or even increase prices when rival exchanges tried to gain market share in 2017 – while still maintaining its market leading position.
The filing states that competitors have not been able “significantly increase their market share” due to Google’s monopoly of online advertising space. This is despite rivals having ‘cut their take rate by half.
In September 2019, Republican Texas Attorney General Ken Paxton announced the probe in front the U.S. Supreme Court Building, along with 12 other attorneys general from other States.
Friday’s unredacted filing comes after a federal judge ruled last Wednesday that the antitrust case could not be sealed.
The investigation of Alphabet Inc. is currently underway in 48 states.
According to a bipartisan group representing nearly every state, the antitrust investigation into Google’s alleged monopoly revealed troubling concerns for consumers and businesses.
Google has denied the charges and called this lawsuit flawed. It claimed that it charges lower ads fees than the industry standard.
In a blog post, Kent Walker, senior vice president for global affairs, stated that Google’s services “help people, create more choices, and support thousands of job opportunities and small businesses across the United States.”