Exposed: Google’s powerful stronghold over online advertising is revealed in court documents
- Papers claim Google takes cut of up to 42% of advertising spending it arranges
- That is up to four times more than the cut its rivals take, legal documents allege
- Figures were contained in newly unsealed legal filing at a New York federal court
- Firm is being sued in US by 16 states’ attorney generals and string of businesses
Google’s powerful stranglehold over online advertising has been revealed in new court documents.
Legal papers in the US claim the internet giant takes a huge cut of up to 42 per cent of the advertising spending it arranges. That is up to four times more than the cut its rivals take, the papers allege.
The figures were contained in a newly unsealed legal filing at a New York federal court.
One Google employee compared the company’s dominance to a major bank such as Goldman Sachs or Citibank owning the entire New York Stock Exchange.
Legal papers in the US claim the internet giant takes a huge cut of up to 42 per cent of the advertising spending it arranges. That is up to four times more than the cut its rivals take, the papers allege (file photo)
Google is being sued in the US by the attorney generals of 16 states and a string of businesses for allegedly using underhand tactics to dominate the advertising market.
The internet giant generates billions of dollars by using its advertising ‘exchange’ to allow businesses to buy advertising space on its search results and other websites.
The group suing Google claims the company takes a cut of between 22 per cent and 42 per cent of these deals. And they say Google tries to ‘lock in’ companies, rather than let them use cheaper rivals.
It alleges Google engineers online advertising auctions to win 80 per cent of the business on offer.
Kent Walker (pictured above), Google’s senior vice president, said in a blog post that the tech giant’s services ‘help people, create more choice, and support thousands of jobs’
The group behind the legal action said one Google employee had conceded that an ‘exchange shouldn’t be an immensely profitable business’ and that Google employees had explained the company charged high prices because ‘we can… smaller publishers don’t have alternative revenue sources.’
Google has disputed the allegations. Kent Walker, Google’s senior vice president, said in a blog post that the tech giant’s services ‘help people, create more choice, and support thousands of jobs’.
In Britain, the markets watchdog has said Google controls 90 per cent of the £7.3 billion market for adverts.
The Competition and Markets Authority has said Google’s ‘unassailable’ position inflates advertising prices, with costs passed on to consumers.
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