Google’s Antitrust Trial Regarding Online Advertising Commences
On Monday, Alphabet’s Google is set to confront U.S. antitrust prosecutors in Alexandria, Virginia. The Justice Department aims to demonstrate that the company has hindered competition in the online advertising technology sector—marking Google’s second significant conflict with the Justice Department in recent times.
Prosecutors claim that Google mainly controls the technology framework that supports the dissemination of news and information on websites through a staggering pace of over 150,000 ad sales online each second.
This case is crucial for U.S. antitrust authorities who are attempting to address perceived monopolistic practices by Big Tech, an issue that has persisted through the administrations of both Donald Trump and Joe Biden.
According to the prosecution, Google executed a sophisticated strategy to take over website advertising tools via acquisitions, enforcing limitations on customer usage of its tools, and purportedly manipulating ad auctions.
Google rejects these claims, arguing that they misinterpret legitimate efforts to enhance its technology and cater to its clients. The company has pointed out that the digital advertising landscape has shifted towards apps and connected TVs, where it faces substantial competition.
If U.S. District Judge Leonie Brinkema determines that Google has violated the law, she would later evaluate the prosecution’s plea to compel Google to divest at least its Google Ad Manager, a system that encompasses the company’s publisher ad server and ad exchange.
Research by stock analyst Wedbush indicates that Google’s advertising technology was responsible for $20 billion, or 11% of its total revenue in 2020, contributing about $1 billion, or 2.6%, to its operating profit that year.
In 2020, Ad Manager accounted for approximately 4.1% of total revenue and 1.5% of operating profit, based on Wedbush’s analysis and court document evaluations.
Recent data was not disclosed in court filings.
The defense for Google is spearheaded by Karen Dunn, a Paul, Weiss partner who has been involved in preparation for debates for several high-profile Democrats including Vice President Kamala Harris.
The government’s legal team, led by Julia Tarver Wood, a seasoned trial attorney who joined the Justice Department last year, previously worked at Paul, Weiss and represented companies such as American International Group, Mastercard, and Amazon.com.
The trial, expected to last several weeks, will include testimonies from both Google and its rivals in the digital advertising arena, including the Trade Desk, Comcast, as well as publishers like News Corp and Gannett, who the prosecution claims were adversely affected by Google’s actions.
This case is among several that challenge supposed monopolistic behaviors in Big Tech.
Recently, the Justice Department secured a ruling against Google in a separate case related to its dominance in online search and is also suing Apple. Meanwhile, the Federal Trade Commission is pursuing actions against Meta Platforms, the parent company of Facebook, and Amazon.
Reporting by Jody Godoy in New York; edited by Matthew Lewis