As the Google antitrust trial commences, the DOJ argues Google created an Ad tech monopoly.
Federal prosecutors are pursuing the breakup of Google's multibillion-dollar online advertising division, claiming that its monopolistic influence is detrimental to both advertisers and publishers.
Second Lawsuit
The second antitrust lawsuit filed by the Justice of Department against Google commenced on Monday in a Virginia courtroom, with federal prosecutors focusing on the company's profitable role as an intermediary in the online advertising market. This case may prove advantageous for prominent news organizations such as Gannett, News Corp., the Guardian, and The Washington Post. These entities pay Google a portion of their revenue for facilitating advertisements on their websites, and many have faced financial challenges in the digital ad era. Additionally, Google's competitors in this field, including Meta and Amazon, could benefit if the outcome is unfavorable for Google.
U.S. officials have aggressively pursued Big Tech companies over the last few years, but Google is the only one of the group to end up on trial.
In August, a judge determined that Google possessed a monopoly in the realm of internet search, representing the most significant antitrust decision in the technology sector since the legal action taken against Microsoft over two decades ago. Currently, Google is contesting allegations that its advertising operations have functioned as a monopoly, resulting in increased advertising costs for clients.
DOJ argues Google created Ad tech monopoly
Google is now directing its attention towards its advertising tools, integral to the company's $200 billion digital advertising sector. The government alleges that Google has breached Sections 1 and 2 of the Sherman Act, which are designed to prevent anticompetitive practices. The Department of Justice will contend that Google has effectively secured publishers and advertisers to its offerings, compelling websites to create alternative solutions. A coalition of states, comprising California, Colorado, Connecticut, New Jersey, New York, Rhode Island, and Tennessee, has joined the lawsuit.
Over the years, Google’s advertising operations have faced significant criticism due to the company's involvement in various aspects of the market, including purchasing, selling, and managing an ad exchange. This multifaceted role provides Google with distinct insights and possible advantages. In its original lawsuit, the Department of Justice referenced internal communications from a Google advertising executive, who likened the company's control over multiple facets of the ad-selling process to a scenario where "Goldman or Citibank owned the NYSE," alluding to the New York Stock Exchange.
The issue at hand concerns the operational framework of Google's advertising product portfolio. Should the Department of Justice prevail, it aims to enforce the divestiture of, at the very least, the Google Ad Manager suite (GAM). This platform enables brands to design and oversee advertising units, monitor advertising campaigns, and allows publishers to sell their advertising inventory.
Initial Antitrust Litigation
In the initial antitrust litigation, the court determined that Google breached Section 2 of the Sherman Act, which prohibits monopolistic practices. Judge Amit Mehta of the U.S. District Court for the District of Columbia concurred with the Department of Justice, which contended that Google has preserved its share of the general search market by establishing significant barriers to entry and a feedback mechanism that reinforced its supremacy. "Google operates as a monopolist and has engaged in actions to uphold its monopoly," Mehta stated.
YouTube CEO Neal Mohan
The Department of Justice intends to summon YouTube CEO Neal Mohan to provide live testimony. Mohan previously served as vice president at DoubleClick prior to its acquisition. Following its integration into Google's advertising technology framework, DoubleClick's technology allegedly enabled Google to mandate that publishers utilize all of its tools to access any specific service, thereby restricting their ability to employ competing services in certain aspects of the online advertising purchasing process, according to the agency's claims.
Google has indicated that it might summon Nitish Korula, the engineering director for Google Assistant, who previously served as a senior technical advisor to Prabhakar Raghavan, the head of search. Additionally, the company has sought testimony from Simon Whitcombe, a vice president at Meta, and has proposed depositions from executives at BuzzFeed and The New York Times.
The case continues.
