Google’s Antitrust Trial: A Battle for Online Advertising Dominance

By Jody Godoy
ALEXANDRIA, Virginia (Reuters) – Alphabet’s Google is accused of attempting to dominate the online advertising technology sector by suppressing competitors and controlling customer access, according to a U.S. Justice Department prosecutor as the latest antitrust trial commenced in Alexandria, Virginia.

Prosecutors claim that Google has a significant hold on the technological framework that facilitates the dissemination of news and information online, conducting over 150,000 ad sales every second.

In the opening statement, Julia Tarver Wood, an attorney from the Justice Department’s antitrust division, alleged that Google employed traditional monopoly tactics, including eliminating rivals through acquisitions, locking customers into its ecosystem, and dictating how transactions are executed in the online advertising marketplace.

“Google is not here because they are big; they are here because they used that size to crush competition,” she asserted.

U.S. District Judge Leonie Brinkema will preside over the case and issue a ruling following the multi-week trial, which is being conducted without a jury.

On the other side, Google’s lead attorney, Karen Dunn, argued that the Justice Department and coalition of states are relying on outdated claims from a time when Google was still in the process of making its tools compatible with competitors’. Dunn emphasized that Google’s tools now have interoperability with rival platforms and stated that the company faces competition from others, such as Amazon.com and Comcast, as digital advertising increasingly transitions to applications and streaming services.

Dunn described the case as “a time capsule,” suggesting that it harkens back to bygone technology like BlackBerries and iPods. She contended that the allegations against Google are reminiscent of claims it successfully refuted in a recent search monopoly lawsuit.

During the trial, prosecutors aim to demonstrate that Google leveraged its dominant technology positions to prevent publishers and advertisers from utilizing alternative tools and to stifle bidding through competitors’ products.

Tim Wolfe, an advertising executive at Gannett, testified on Monday that the company has relied on Google’s publisher ad server for approximately 13 years and claimed that no other viable options exist.

If Judge Brinkema determines that Google engaged in illegal practices, she will then consider the government’s request to force Google to divest, at a minimum, its Google Ad Manager platform, which includes its publisher ad server and ad exchange.

Following the opening statements, shares of Alphabet saw a decline of 1.7% in afternoon trading.

Research from stock analyst Wedbush indicated that Google’s ad tech tools generated $20 billion, making up 11% of its total revenue in 2020, as well as $1 billion or 2.6% of operating profit in that year.

In 2020, Ad Manager accounted for 4.1% of revenue and 1.5% of operating profit, according to Wedbush’s research and analyses of court documents. Details regarding more recent figures were redacted from court documents.

This case is part of a series of ongoing challenges against alleged monopolies in Big Tech. In a separate ruling last month, the Justice Department won a case against Google concerning its dominance in online search and is also pursuing legal action against Apple. Meanwhile, the Federal Trade Commission is engaging in cases against Meta Platforms (Facebook’s parent company) and Amazon.