On Tuesday, the U.S. Justice Department accused Alphabet Inc.’s (GOOGL.O. Google) of abusing its digital advertising dominance and threatened to destroy a key business that is at the core of Silicon Valley’s most profitable internet companies.

Google’s ad manager suite should be sold by the government, according to the government. This business not only generated 12 percent of Google’s revenue in 2021 but also played a crucial role in Google’s overall sales.

The antitrust complaint stated that Google used “anticompetitive, exclusionary and illegal means to eliminate or severely reduce any threat to it dominance over digital advertisement technologies.”

Google’s advertising business accounts for around 80% of its revenue. The government is “doubling down” on a flawed argument that would slow the pace of innovation, increase advertising fees, and make it more difficult for small businesses and publishers grow.

According to the federal government, its Big Tech lawsuits and investigations are aimed at leveling playing fields for smaller competitors to a group that includes Amazon.com (AMZN.O), Facebook’s owner Meta Platforms and Apple Inc (AAPL.O).

“By suing Google for monopolizing advertisement technology, the DOJ today targets at the heart of internet giant’s power,” stated Charlotte Slaiman (Public Knowledge competition policy director). “The complaint exposes the anticompetitive strategies of Google that have hampered our internet ecosystem.”

Tuesday’s lawsuit was filed by President Joe Biden, a Democrat. It follows a 2020 antitrust suit brought against Google during Donald Trump’s term.

2020 lawsuit alleges violations of antitrust law regarding how the company acquired or maintained its online search monopoly. It is set to go to trial in September.

EIGHT STATES IN LAWSUIT

Tuesday’s lawsuit was joined by eight states, including California, Google’s home state.

Rob Bonta, California’s State Attorney General, stated that Google’s practices had “stifled creativity” in an area where innovation is vital.

Phil Weiser, Colorado Attorney General, stated that Google’s dominance has resulted in higher prices for advertisers and lower revenue for publishers who have ad space available. He stated that he was filing the lawsuit to end Google’s monopoly, and to restore competition in digital advertising.

Google shares fell 1.9 percent Tuesday.

Google’s well-known search engine, which is completely free, generates revenue through interconnected adtech businesses. The government requested the sale of the Google Ad Manager suite including AdX, Google’s ad-exchange.

Google Ad Manager offers a range of tools that allow websites to sell advertising space and also an exchange that connects publishers with advertisers.

Advertisers and publishers of websites have complained about Google’s inability to be transparent about where their ad dollars are going, including how much is paid to publishers and how much to Google.

Concerns have been raised about products within the ad tech stack where advertisers and publishers use Google’s tools for buying and selling ad space on other websites. This business was worth approximately $31.7 billion, or 12.3% of Google’s total revenues in 2021. Publishers account for 70% of this revenue.

Paul Gallant, Cowen Washington Research Group, stated that while an ad tech sale “may not be a major milestone in the industry,” it could have a significant impact on Google’s ad targeting capabilities.

It connects to all Google’s businesses and ties them together. Gallant stated that Google may be more worried about losing ad technology down the line than people think.

To make the company a major player in online advertising, it made several purchases including DoubleClick 2008 and AdMob 2009.

‘PROJECT POIROT’

Although Google is still the market leader, it has seen its share of U.S. digital advertising revenue decline to 28.8% in 2016 from 36.7% in 2016. Insider Intelligence reports that this was a result of Google’s long-standing dominance.

The Justice Department requested a jury to resolve the case. This was filed at the U.S. District Court for Eastern District of Virginia.

This lawsuit details a variety of Google’s attempts at dominating the advertising market.

Header bidding was the method by which companies could bid on advertising space on websites without Google.

It lists a number of projects, including one called “Project Poirot”, named after Agatha Christie’s master detective Hercule Poirot. This project was created to respond to and identify ad-exchanges that have adopted header bidding technology.

According to the 149-page complaint, Google doubled down on Project Poirot’s initial success manipulating advertisers’ spending in order to lower competition from rival ad platforms. The complaint stated that rivals AppNexus/Xandr would lose 31% of DV360 advertiser spend, Rubicon would be losing 22%, OpenX 42% and Pubmatic 26%.