On October 20 local time, the U.S. Department of justice launched an antitrust lawsuit against Google. It is also the largest anti monopoly case in more than 20 years.
The U.S. Department of justice has been conducting an antitrust investigation into Google for a year. On July 29, the U.S. Congress held an antitrust hearing, and CEOs of four major technology companies attended as witnesses.
Google CEO sandar pichay responded that he was not familiar with the document, but said there was competition for online search elements, such as searching for specific items on some travel or retail sites, or vertical search.. When we look at vertical search, it validates what we call competition, said Mr. picchay
Googles tie-in strategy is accused of crowding out rivals by us key antitrust investigation
In recent months, U.S. investigators have asked executives of rival companies about the pricing and operations of Googles network. This business sells services that can handle almost every aspect of digital advertising, from brand creativity to content displayed on consumer screens.
The focus of the inquiry was on the discounts, special features and other terms offered by Google, which pushed advertisers and publishers to use only Googles products, rather than mix and match their competitors services. Regulators are also asking how Googles larger online search business interacts with the web sector to increase its share of the digital advertising market, people familiar with the matter said.
Tie in strategy makes the sale of one product conditional on the purchase of another product. Gene Kimmelman, a senior adviser to the public knowledge think-tank and a former chief legal adviser to the Department of justices antitrust division, said the practice is usually not illegal, but if it is used to consolidate a dominant market position, it could be against the law.
If these tools are used to maintain monopolies, prevent new players from entering, and crowd out competitors, then they may be antitrust, Kimmelman said
Now, investigators are asking similar questions about Google. They recently interviewed executives of Googles competitors in July, and the inquiries became more detailed. According to people familiar with the matter, some interviewees even used whiteboards to outline the complex structure of the advertising technology market and Googles operations.
While we are still cooperating with the investigation, it is clear that our digital advertising products compete with hundreds of competitors and technologies in a crowded industry, said Google spokesman Julie tarallo McAlister. This competition increases the choice, helps to reduce the price of Internet advertisement, and reduces the cost of merchants and consumers.
Googles Web division generated more than $21 billion in revenue last year, but it grew slower than the rest of the company. Google has often framed the business as an assistant to web publishers that rely on digital advertising. But critics say Google owns and takes advantage of the market so much that advertisers and publishers are forced to use more of its products.
According to people familiar with the matter, government investigators asked how Google would exempt publishers from using its sellers tools if publishers chose to auction their advertising space in the Google ad market. Regulators also asked about Googles decision in 2015 to limit advertising purchases on its dominant YouTube video service to its own auction tool dv360.
Competitors have also complained to investigators that Google has given its dominant online search business an unfair advantage in its display advertising business. When advertisers buy search ads, Google allows them to choose to transfer any extra marketing money to display ads. That extra spending will then flow into Googles advertising network and trading platform, which many competitors cannot provide.
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