Antitrust lawsuits in the US and EU mean fines and lawsuits for Apple and Google

Google has recently been accused of all sorts of antitrust violations, but right now the company’s legal team is focused solely on defending the tech giant in a case brought by the Justice Department that attacks the company’s near-monopoly position in the online advertising market.

At the same time, Google is facing a $2.7 billion EU fine for its monopoly control over the online comparison shopping business. And it’s not just Google that faces tougher European regulations: its fierce rival Apple has just lost a lawsuit that means it could owe Ireland about $14 billion in back taxes.

Early in yesterday’s legal proceedings, Justice Department lawyers made clear they considered it a terrible monopoly, noting that the tech giant wasn’t in trouble just because it was big, but because it “used that size to crush competition.”

Julia Tarver Wood, the department’s chief legal officer, said the rot began when Google bought ad company DoubleClick in 2008. Wood said it used the technology to dominate the digital ad auction market — and did so effectively that the company now has an 87 percent share of the ad-selling technology market. That means Google can tip the scales in its favor by charging ad partners more per order and taking a bigger share of each transaction, indirectly hurting industries that rely on ad sales, such as news publishers, New York Times reported.

Google has defended itself by arguing that the case against it is “factually flawed.” The company also told the judge that “success is not illegal” and tried to argue that customers come to Google for digital ads only because its services are the best among a “solid” group of competitors, Wall Street Journal he wrote.

Google’s chief legal officer, Karen Dunn, interestingly pointed out that the online advertising market has grown from $8 billion in 2008 to about $140 billion in 2022. Dunn may have been trying to suggest that intense competition has helped the digital ad market grow, but her words shed light on why Google has been able to maintain its market share and beat out its competitors. A nearly 90 percent share of a $140 billion market is enough cash for Google to do whatever it wants — including pushing ad competitors aside with sheer financial muscle.

The case is important not only because it could impact the future of various industries – large and small – that rely on Google’s advertising system for revenue, but also because Google has come under scrutiny for abusing its dominant position IN online search market.

Digital search and advertising go hand in hand, and after Google was recently found guilty of monopolizing the search market, the Justice Department is considering a range of possible remedies — which could include breaking up Google, perhaps spinning off its advertising business into another company. Combined with the fallout from the case that began this week, we could be seeing a seismic shift in the digital ad game, forcing all kinds of publishers like New York Times to single-person businesses to adapt to the new ad market conditions. The hope is that all players will be able to make more money and gain more control over their own revenues. This could come at a key time, as the online search and advertising market is set to be upended by AI search innovations.

While Google’s antitrust case is making headlines, Google continues to face the unbreakable target of tough EU regulators. The search giant just lost an appeal in a 2017 antitrust case in which the EU found that Google had abused its market share to dominate the online comparison shopping market. The Court of Justice of the EU has now ruled that “Google’s conduct was discriminatory and fell outside the scope of substantive competition,” news site TechCrunch reports. At the end of the 2017 case, Google faced a fine of about $2.7 billion at current exchange rates. Ouch.

Meanwhile, Google’s fierce tech rival Apple has also been the subject of regulatory lawsuits and run afoul of the law. Ending a decade-long battle over Apple’s tax treatment in the bloc, the EU’s top court ruled that Apple received unfair state aid in the form of Ireland’s ultra-low tax rates and now owes $14.4 billion in back taxes, news site CNET reported. Margrethe Vestager, the European Commissioner for Competition, wrote on X that the ruling means “Ireland must now repay the bloc up to €13 billion in unpaid taxes” — money that will come from Apple.