Google Faces Setback as Judge Rejects Motion to Dismiss Antitrust Claims in Ad Suit

In a legal setback for Alphabet Inc.’s Google, Judge Kevin Castel of the US District Court for the Southern District of New York declined the tech giant’s bid to dismiss certain claims in a lawsuit brought forth by advertisers. The advertisers allege that Google’s practices have led to inflated ad prices and restricted access to lower-priced alternatives.

The ruling, issued late last week, denied Google’s motion to dismiss the case on multiple counts. Judge Castel deemed the arguments put forth by the advertiser plaintiffs as plausible, particularly concerning Google’s purported use of anticompetitive practices within the ad-exchange market, reported Bloomberg Law.

Key to the judge’s decision was the assertion that the advertisers had demonstrated potential antitrust injury, suggesting that Google’s actions may have resulted in advertisers paying supra-competitive prices for transactions occurring on AdX, Google’s advertising exchange platform.

Read more: Google’s US Ad Antitrust Suit Trial Date Set For March 2024

This lawsuit, which primarily targets Google’s online advertising business and seeks to compel the company to divest certain parts of its operations, marks the first legal action against Google initiated under the Biden administration. It comes in the wake of a previous lawsuit filed by the Department of Justice in October 2020 during the Trump administration, alleging that Google leveraged its monopoly power to stifle competition in internet search through exclusionary agreements. The trial for the earlier case is slated to commence in September.

Google’s advertising division remains a financial powerhouse, having generated a staggering $54.5 billion in revenue in the quarter ending on September 30. This revenue is derived from various sources, including Search, YouTube, Google Network ads, and other advertising avenues.

The outcome of this legal battle could have far-reaching implications not only for Google but also for the broader landscape of online advertising and competition within the tech industry.

Source: CNBC