U.S. sues Google on digital ad business dominance, joined by eight states

(Reuters) – The U.S. Justice Department filed a lawsuit against Alphabet’s (GOOGL.O) Google on Tuesday over allegations that the company abused its dominance of the digital advertising business, according to a court document.

“Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” the government said in its antitrust complaint.

The Justice Department asked the court to compel Google to divest its Google Ad manager suite, including its ad exchange AdX.

Google did not immediately respond to a request for comment.

The lawsuit is the second federal antitrust complaint filed against Google, alleging violations of antitrust law in how the company acquires or maintains its dominance. The Justice Department lawsuit filed against Google in 2020 focuses on its monopoly in search and is scheduled to go to trial in September.

Eight states joined the department in the lawsuit filed on Tuesday, including Google’s home state of California.

Google shares were down 1.3 percent on the news.

The lawsuit says “Google has thwarted meaningful competition and deterred innovation in the digital advertising industry, taken supra-competitive profits for itself, prevented the free market from functioning fairly to support the interests of the advertisers and publishers who make today’s powerful internet possible.”

While Google remains the market leader by a long shot, its share of the U.S. digital ad revenue has been eroding, falling to 28.8% last year from 36.7% in 2016, according to Insider Intelligence. Google’s advertising business is responsible for some 80% of its revenue.

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