Teads has officially filed a lawsuit against Google in New York and is looking for financial compensation. The suit follows a ruling by a judge last year, which found that Google had engaged in unlawful anticompetitive practices and monopolistic conduct in digital advertising markets.
The complaint filed by Teads outlines how Google’s exclusionary practices restricted fair competition and not only limited growth, but also revenue potential, for Teads and other independent platforms and advertisers.
Why is Teads Taking Google to Court?
Teads, which is an omnichannel advertising platform and competitor to Google in the ad tech space, just filed a lawsuit in New York against Google and Alphabet, Google’s parent company, and is seeking financial compensation.
The company’s complaint outlines how Google’s exclusionary ad tech practices restricted fair competition across the market, and led to limited growth and revenue potential for Teads and other independent platforms.
The 85-page lawsuit alleges that Google illegally forced advertisers on Google Ads to use its own exchange, called AdX, thus shutting out other independent supply-side platforms, like Teads.
The suit also looks to back up and quantify this claim by showing an analysis, which says that Google tying Google Ads to AdX caused Teads to lose around 6.88 trillion ad impressions between 2017 and 2023.
Speaking about the suit, David Kostman, CEO of Teads, said that “For years, Google used its dominance to suppress fair competition and distort the digital ad tech ecosystem to its own advantage. We filed this action to recover the financial damages caused to our business and restore a transparent, competitive marketplace for publishers and advertisers.”
Teads has said it filed the suit not only to recover monetary damages and restore a fair market, but also to hold Google accountable for marketplace distortions. The company is also far from the only ad tech platform to sue Google over its ad tech practices, joining the likes of OpenX, PubMatic, Magnite, and others.
The Suit Follows Last Year’s Major Court Ruling Against Google
The lawsuit filed by Teads comes over a year after the United States District Court for the Eastern District of Virginia ruled that Google had engaged in unlawful anticompetitive and monopolistic practices in certain digital ad tech markets.
Specifically, the judge found that Google monopolized both the publisher ad-server and ad-exchange markets, and unlawfully tied them together. This ruling served as the legal catalyst for this suit by Teads, as well as the other suits that other ad tech platforms have sent Google’s way.
Our Take
The Ad Tech Monopoly May Have Benn Inflating Customer Acquisition Cost
While this particular suit is between Google and an ad platform, the retailers, sellers, and ecommerce brands that buy ads may have also been impacted.
If a single organization, in this case Google, controls both the demand-side tool (Google Ads) and the supply-side tool (AdX), they may be able to influence auctions behind the scenes and limit actual competition, which may drive up cost per click (CPC) or cost per acquisition (CPA).
As a result, there’s a chance that if this sort of unlawful monopoly were taking place and fair competition was restricted, companies would be stuck paying artificially high and inflated ad prices. Speaking of high ad prices, this lawsuit comes at a time when Google Ad clicks are only getting more expensive, making things even harder on ecommerce brands.
While the result of this lawsuit, and the others like it, isn’t known yet, many ecommerce brands are hoping that it may bring about change and allow for a more open, fair, and transparent digital advertising market, which could help lower costs.
