Assistant Attorney General Jonathan Kanter Delivers Remarks on Lawsuit Against Google for Monopolizing Digital Advertising Technologies

Remarks as Delivered

Thank you, Attorney General Garland and Associate Attorney General Gupta.

As alleged in our complaint, in late 2016, a Google digital advertising executive asked the following question in an internal email exchange: “[I]s there a deeper issue with us owning the platform, the exchange, and a huge network? The analogy would be if Goldman or Citibank owned the [New York Stock Exchange]?”

The answer to Google’s rhetorical question is: yes. Indeed, there is a deeper issue: and that issue is the Sherman Antitrust Act. Google’s alleged misconduct amounts to numerous violations of the United States’ antitrust laws. And that is precisely why we are here today.

The lawsuit we have filed today seeks to hold Google to account for what we allege are its longstanding monopolies in digital advertising technologies that content creators use to sell ads and advertisers use to buy ads on the open internet.

In the complaint, the Department alleges that Google engaged in 15 years of sustained conduct that had — and continues to have — the effect of: driving out rivals, diminishing competition, inflating advertising costs, reducing website publisher revenues, stymieing innovation, and flattening our public marketplace of ideas.

The complaint filed today alleges that Google engaged in a pattern of acquisitions to obtain market dominance and – once it had obtained that dominance – a series of exclusionary acts to expand and entrench its monopoly power.

Here are just five examples:

locking in content creators through tying arrangements;
manipulating auctions, including by giving itself a “first look” and then “last look” advantage over competing ad exchanges;
blocking industry participants from using rivals’ technologies and punishing those that tried;
amassing and abusing troves of its rivals’ bidding data; and
depriving customers of choice by degrading the quality of Google’s own.
Because Google dominates every part of the ad tech industry, it has the power to impose a surcharge on display advertising transactions, an industry where billions of dollars are transacted via instantaneous auctions each year in the United States.

Google’s own documents estimate it keeps on average at least 30 cents of each advertising dollar that flows through Google’s ad-tech tools. For some transactions, and for certain customers, Google keeps significantly more.

In addition to the harm Google inflicts on content creators and online advertisers, the lawsuit alleges that Google’s conduct has also harmed the United States Government, including the United States Army.

Google’s alleged anticompetitive conduct over the last 15 years is perhaps best explained through the words of Google’s own employees and documents, which are quoted extensively in the Department’s complaint.

Here are just five examples:

A Google employee characterized Google’s ad exchange as an “authoritarian intermediary.”
A senior Google executive conceded that switching ad servers for publishers is a “nightmare” that “[t]akes an act of God.”
A Google employee described the company’s scheme to pay publishers “$3 [billion] yearly” by restricting access to Google Ads and “overcharging its advertisers.”
A Google manager made clear that: “[o]ur goal should be all or nothing – use [Google’s ad exchange] or don’t get access to our [advertiser] demand.”
A Google executive detailed the company’s steps to “dry out” rivals.
For more than two centuries, advertising in this country has funded newspapers and other avenues of free expression. Revenue from advertising has provided critical support for content creation, the sharing of information, and the exchange of viewpoints, which promote a vibrant, free, and healthy society.

The Antitrust Division – and I am so proud of this – has a storied history of safeguarding competition in offline media, from music to broadcasting to publishing. It is now just as important — if not more — to protect competition in the digital marketplace of ideas, where powerful network effects make monopoly power even more durable and harmful, and the abuses by companies with monopoly power like Google even more pernicious.

In closing, I would like to thank the unbelievably hardworking, dedicated, talented, and extremely awesome staff of the Antitrust Division whose tireless efforts to untangle the complex web of Google’s alleged conduct resulted in today’s filing.

I am also deeply pleased to thank the Attorneys General of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and the Commonwealth of Virginia, and their extremely talented staff – we’ve enjoyed an excellent and constructive working relationship with our partner State Attorneys General. I would also like to thank the U.S. Attorney’s Office of the Eastern District of Virginia for joining us in filing this important and historic case.

Thank you. I look forward to your questions.