Although the combined market share of the Google/Meta (Facebook) duopoly fell below the symbolic threshold of 50% in 2022, according to Insider Intelligence, it remains far too high in the eyes of the American government. Indeed, the Department of Justice as well as eight American states, including California and New York, have decided to file a complaint against Alphabet, the parent company of Google, to put an end to the anti-competitive domination of the American group on the market. online advertising. In 2022, the Mountain View firm took 28.8% of the market, against 19.6% for Meta.
In the eyes of the plaintiffs, Google has committed an infringement of competition law by imposing its stranglehold on the digital advertising ecosystem, in particular through its suite of services and tools for advertisers, website publishers and various intermediaries who wish to display advertising messages on the websites. “Website publishers are earning less and advertisers are paying more, while unchecked competitive pressure could discipline prices and bring out more innovative advertising technology tools”says the Department of Justice in its complaint.
An argument rejected outright by Google, which accuses the US government of wanting “designate winners and losers” on the market “already highly competitive” digital advertising. The American giant believes that a victory for the Department of Justice “would slow innovation, increase advertising costs, and make it harder for thousands of small businesses and publishers to grow”.
Avalanche of antitrust complaints in recent years
The threat hovering over Google is not insignificant, since the plaintiffs want to force Sundar Pichai’s group to simply dismantle its advertising activity, which still accounts for nearly 80% of its income today. The noose has been tightening around the Californian firm for several years now. As early as September 2019, almost all US federal state prosecutors had announced the opening of an antitrust investigation into alleged abuses of dominant position by the Californian company in the online advertising and search engine market.
The following year, the Justice Department in turn initiated proceedings to counter Google’s abuse of its dominant position in the online search and advertising market. Two months later, a coalition of American states, led by Texas, had amplified the movement, going so far as to accuse Google of having entered into an illegal agreement with Meta, the other juggernaut in the sector. All the ingredients were there to pave the way for the biggest lawsuit in the technology sector since the Microsoft affair in 1998. The new complaint filed at the beginning of the year only reinforces this hypothesis.
In France, the practices of the Alphabet subsidiary also found themselves in the sights of the Competition Authority, which decided in June 2021 to impose a fine of 220 million euros on Google for these same grievances. The American group had not flinched at the time and had undertaken to do what was necessary to improve the interoperability of its services with third-party solutions. But the American authorities seem ready to go a step further, by forcing the group to dispose of certain strategic assets, which could have a serious impact on its portfolio.