Landmark Lawsuit Could Force Google to Divest Ads

A lawsuit filed by the United States Justice Department targets Alphabet’s Google and its monopoly in the advertising space. If the case succeeds, rivals of Google Ads, such as Apple, Meta, Microsoft, and Amazon could find an advantage. However, advertisers would have an uncertain future in this scenario.

The Justice Department demanded in the complaint that Google divest its Ad Manager, a suite of tools that allows websites to distribute ads and find customers based on their interests, gender, location, and more.

Apple has been swiftly increasing its emerging advertising sector, endorsing its privacy features, and could be a budding contender if Google Ads loses its stronghold. Since Apple’s data is compiled through phone ownership, its Safari web browser, and the dispersal of applications through its app store, it will have the ability to swiftly diversify its focus into the ad realm.

If the lawsuit filed by the Justice Department succeeds, advertisers and publishers will both experience more leverage with multiple options and an entirely new roster of players. With that comes more competition, as the space will open up to many others.

Google’s advertising competitors are constantly developing new products for publishers (news websites) and advertisers buying those ads. If Google is forced to divest, competitors such as Microsoft’s Xandr will have an edge, as they will continue to work with both sides.

The gains will also come financially for publishers, as they will have more options, inevitably driving down the overall cost in the sector. As more competition emerges, Google Ads will predictably become less effective.

This is not the first time the government has filed lawsuits against dominant companies in an effort to break up monopolies. In 1974, a lawsuit broke up AT&T, which resulted in many advancements and innovations in the telephone industry. In 1998, the Justice Department filed a suit against Microsoft aimed at reining in the company by prohibiting them from extending its dominant operating system to the internet browser. Ironically, the Justice Department and Microsoft settlement paved the way for other internet innovators such as Google.

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Written by the digital marketing team at Creative Programs & Systems: https://www.cpsmi.com/