One month after a judge declared Google’s search engine an illegal monopoly, the tech giant faces its second antitrust lawsuit in the United States over its advertising technology.
According to court papers, the US Department of Justice and a coalition of states contend that Google has built and maintains a monopoly over the technology that matches online publishers to advertisers. The government contented that dominance over the software on both the buy side and the sell side of the transaction allows Google to keep as much as s 36 cents on the dollar when it brokers sales between publishers and advertisers. They also claimed that Google controls the ad exchange market.
This case is part of Biden administration’s wider push to regulate big tech. It follows a vital victory for the DOJ in August where the judge ruled that Google had built an illegal monopoly over online search through multibillion dollar exclusionary contracts. It is unclear what penalties it might face.
DOJ’s case against Google:
Beginning in Virginia, the trial centers on Google’s ad tech business. The company was accused of monopolizing ad servers and the ad network, monopolizing or attempting to monopolize ad exchanges, unfairly bundling its tools for publishers and advertisers, and harming competition and journalism through their dominance.
“One monopoly is bad enough. But a trifecta of monopolies is what we have here,” said DOJ lawyer Julia Tarver Wood during her opening statement.
Federal prosecutors are reportedly planning to present internal Google documents and witness testimony to support their argument. Potential witnesses to testify against Google include executives from publishers like Disney, the New York Times, BuzzFeed, Vox and NewsCorp. Founders and CEOs of various ad tech companies, advertisers, and a long list of former and current Google employees are also set to testify.
Google’s Contention:
Google’s defense is that the markets defined by DOJ are too narrow and not representative of the true market, alleging that the trial focuses on a two-sided market rather than the three.
Furthermore, among other arguments, the company claimed that its exclusionary practices are justified in order to ensure quality, privacy, safety, and security for all parties.
The tech giant issued a statement earlier in June that deemed the lawsuit “a meritless attempt to pick winners and losers in a highly competitive industry”.
Implications of the trial:
The effects of the case could have significant impacts on the digital and advertising world. If Google wins the case, it could reaffirm the company’s dominance and reassert their status quo, demonstrating the lack of control governments and regulatory bodies have over tech giants.
However, if Google loses, it could potentially face several penalties, including the possibility of having to break apart its ad tech business and undo acquisitions. This would allow fair competition in the industry.
Although the trial was originally meant to take place before a jury, Google has avoided that outcome by paying the government over $2m to settle claims that its ad tech overcharged federal agencies. The case will now be decided by US District Judge Leonie Brinkema.
The trial is expected to last several weeks before an outcome is declared.
