Alphabet, which owns Google, has been sued by its investors. They claim that the company is a monopoly in the online advertising market, and the investigation initiated by the US Department of Justice on this matter has already led to “significant loss and damage.” The claim may receive the status of a collective.
In addition to Alphabet itself, among the defendants are Sundar Pichai, CEO of the holding, Ruth Porat, chief financial officer, and Philipp Schindler, director of brand development – according to the plaintiffs, the company deliberately concealed antitrust violations from shareholders. If the lawsuit is classified as a class action lawsuit, the plaintiffs will be everyone who purchased Alphabet shares between February 4, 2020 and January 23, 2023, the day before the US Department of Justice announced the opening of an antitrust investigation into Google and filed a lawsuit.
The department believes that Google deliberately monopolized the digital advertising market, absorbing competitors, forcing advertisers and publishers to use its tools, distorting the competitive nature of advertising auctions and manipulating their results. If the court decides that the company violated the law at the suit of the Ministry of Justice, Google will be forced to sell the Ad Manager package and other advertising tools to restore the competitive environment.
The authors of the new lawsuit allege that the company’s management knew about the anti-competitive nature of their actions, but did not stop violations of the law in order to generate income. Top managers, the plaintiffs allege, had a choice: admit the illegal nature of their actions and suffer the consequences, such as a drop in stock prices, or make a series of deliberately false statements between 2020 and 2023.
The DOJ antitrust lawsuit concerning the online advertising market is still in its early stages, but a similar 2020 case to monopolize the web search market is now showing interesting twists: the company was recently accused of deliberately destroying evidence – messages in internal chats.
Investors in their lawsuit demand compensation for material damage associated with the actions of the Ministry of Justice, but it seems that it will not be easy to prove the fact of such damage, The Register is sure. After the opening of the 2020 antitrust case, Alphabet shares, on the contrary, went up and mostly rose in price until the beginning of 2022. With the filing of the second antimonopoly lawsuit, a certain dip actually formed in the quotes of securities, but already in early February, the company’s shares more than won back the fall. Another positive factor for the market was the recent series of announcements of new AI products from Google. And the instability of Alphabet shares in 2022 generally repeated the picture of competitors, and the actions of the Ministry of Justice were clearly not to blame.
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