The latest antitrust lawsuit threatens to break up the company, this time over its advertising technology. According to court papers, the Justice Department and a coalition of states contend that Google built and maintains a monopoly over the technology that matches online publishers to advertisers. Dominance over the software on both the buy side and the sell side of the transaction enables Google to keep as much as 36 cents on the dollar when it brokers sales between publishers and advertisers.
This case is part of the Biden administration’s broader push to regulate Big Tech. It follows a significant victory for the DoJ in August when a judge ruled that Google had illegally monopolized online search.
What DoJ’s charges against Google are:
The trial, which begins in Virginia, centers on Google’s Adtech business, which connects publishers with advertisers and accounts for over three-fourths of Google’s revenue.
* Monopolized ad servers and the ad network.
* Monopolized or attempted to monopolize ad exchanges.
* Unfairly bundled its tools for publishers and advertisers.
* The department argues that Google’s dominance in these areas has harmed competition and journalism.
What Google’s contention is
Google has refuted allegations of charging excessive advertising fees compared to its competitors. The company argues that its integrated technology, spanning the buy side, sell side, and the middle, ensures faster ad and webpage loading times and enhances security. Additionally, Google asserts that customers have the flexibility to work with external ad exchanges.
In a pretrial filing, Google’s lawyers criticized the government’s case for focusing solely on display and banner ads on desktop web pages. They argue that the case fails to consider the significant shift in consumer behavior towards mobile apps and social media advertising over the past 15 years.
Google’s legal team contends that the government’s focus on a narrow subset of advertising is outdated, as user attention has migrated to other platforms. They point out that 2012 was the last year users spent more time accessing websites on the open web compared to social media, videos, or apps.
No phones allowed in the courtroom
The trial, expected to last several weeks, is taking place in a courthouse that adheres to traditional practices, including a strict ban on technology. This restriction has frustrated the tech press corps, accustomed to live-tweeting updates from the courtroom.
Even the lawyers involved in the case have been limited in their use of technology. At a pretrial hearing, Google’s lawyers requested additional computers for their team, but the judge denied their request.
Key Developments and Potential Implications
* Legal Battles: Google has already faced scrutiny from a US judge for its handling of privileged information.
* Evidence and Testimony: Proving Google’s monopoly may not be difficult, but the DoJ will need to demonstrate that Google abused its dominant position.
* Potential Remedies: If successful, the DoJ could seek to break up Google or force it to divest certain assets.
* Google’s Defense: Google has argued that breaking it up would harm innovation and raise advertising fees.