The Department of Justice earlier this year announced an antitrust lawsuit against Google, claiming the company had used anticompetitive tactics to monopolize the online advertising industry.
This is the latest lawsuit against Google, alleging it monopolized search engines. It goes to trial September 12.
Despite Justice’s claims of anticompetitive behavior, Google’s initial success —fueled by significant early investments — played a major role in allowing the company to grow. It is difficult to separate Google from its advertising successes. Competition for online advertising continues to grow despite this advantage.
Justice claims Google has been working to establish dominance in the online advertising market by establishing itself on all sides of the transaction. This includes facilitating transactions between businesses looking for ad space and popular websites selling ad space. The control of buying and selling online advertisements is known as a full ad tech stack.
While Google is a significant force in online advertising, having a large market share is not enough to violate antitrust law. Google owes much of its success to two significant factors. One is its innovative approach to searching the internet, and the second is its ability to secure large investments early.
Money isn’t everything. Even with a major investment, Google would not have made it as far as it had without genuinely good ideas and services. What made Google successful was its ideas on how to make searching the internet more intuitive. At the time, their biggest competitor, Yahoo, sought to catalogue the internet in much the same way as a physical library. In contrast, Google did away with strict categories and instead prioritized search results by cross-referencing to search entire pages in a more natural way to find the information the user is seeking.
Read the full Inside Sources article, here.
Trey Price is a technology policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information, visit https://www.theamericanconsumer.org/ or follow us on Twitter @ConsumerPal.