A pedestrian passes by the Google office in New York City on Jan. 25, 2023.
Leonardo Munoz | View Press | Getty Images
Following a landmark antitrust case victory against **Google** in August, the Department of Justice is heading back to court, this time focusing on the tech giant’s advertising business. The government alleges that Google has illegally monopolized the online ad market, using its dominance to unfairly raise prices for advertisers and suppress competition. The trial kicks off in Alexandria, Virginia, on Monday, marking the first tech antitrust trial stemming from a case brought by the Biden administration. This second case could result in a partial breakup of Google’s advertising operations, potentially leading to a flood of lawsuits from advertisers seeking monetary compensation for alleged damages caused by Google’s alleged monopolistic practices.
Key Takeaways
- The Department of Justice’s second antitrust suit against Google focuses on the company’s advertising business, alleging that Google has illegally monopolized the industry.
- This new trial could lead to a partial breakup of Google’s ad operations, specifically its **Google Ad Manager** suite, a marketplace that enables brands to create, manage, and track ad campaigns while allowing publishers to sell ad inventory.
- If successful, the case could result in significant financial penalties for Google, as well as a wave of lawsuits from advertisers seeking damages. Bernstein analysts estimate that Google could face up to $100 billion in such lawsuits.
- The trial is expected to last several weeks and will involve testimony from key executives at Google, Meta, and other companies, as well as expert witnesses.
What each side will argue
The DOJ’s argument centers around Google’s alleged practice of using its dominance in the ad tech industry to unfairly raise ad prices and exclude competitors. The agency points to Google’s acquisitions of companies like **DoubleClick** in 2008, and its development of services that enable ad buyers to target users across the internet, as key evidence of its monopolistic practices. The DOJ alleges that Google’s control of **ad servers**, the technology used by publishers to sell ads, allows it to unfairly inflate prices for advertisers.
DOJ’s Claims
- Google’s M&A strategy “set the stage for Google’s later exclusionary conduct across the ad tech industry,” according to the Justice Department.
- Google controls 91% of the market for ad servers, and leverages that power to unfairly raise ad prices.
- Some publishers were forced to switch to alternative funding models like subscriptions or even went out of business due to Google’s dominance.
- The DOJ will present testimony from several Google executives, including YouTube CEO Neal Mohan, who previously served as a vice president at DoubleClick.
Google’s Defense
Google refutes the allegations, arguing that the online ad market is highly competitive and that advertisers have numerous options besides Google. It maintains that its ad tools are necessary for managing the billions of ad auctions that occur daily across the internet. Google will also highlight that it has always offered competitive ad rates to its clients.
- Google will argue that the DOJ’s proposed remedies would stifle innovation, increase ad fees, and hinder growth for small businesses and publishers.
- Google will emphasize that its ad tools are the best available for managing the complex processes involved in ad auctions.
- Google will argue that its acquisitions of DoubleClick and AdMeld were not anticompetitive, and that regulatory authorities approved those deals.
- Google will point to the presence of competitors, including Meta, to counter the DOJ’s claim of a monopoly.
A Significant Case for Online Advertising
This second antitrust case against Google could have a profound impact on the future of online advertising. If the DOJ is successful, it could lead to a significant reshaping of the industry, granting advertisers more power and giving rise to new competitors. The trial will undoubtedly attract considerable attention from both the tech world and the advertising industry, as its outcome could set precedents for the regulation of online advertising for years to come.
