Google Faces Antitrust Trial

By Jody Godoy

(Reuters) – Alphabet’s Google is set to face a second antitrust trial next week, where the U.S. Department of Justice (DOJ) will challenge how the search giant monetizes advertising in a way that allegedly harms news publishers.

This case is part of the Biden administration’s push to regulate Big Tech through antitrust laws, following a significant win for the DOJ on August 5, when a judge found that Google illegally monopolized online search.

While the previous case targeted Google’s widely-used search engine, the upcoming trial in Alexandria, Virginia, will focus on the less-visible technology that connects website publishers with advertisers. These advertising tools account for more than 75% of Google’s $307.4 billion revenue in the last year, heavily reliant on advertising.

Brian Wieser, an advertising consultant and financial analyst, remarked, “Google is far and away the largest seller of advertising on earth,” emphasizing that Google touches every part of the advertising industry.

The DOJ and a coalition of states aim to demonstrate that Google violated U.S. antitrust laws within its digital advertising business. A successful case could lead to U.S. District Judge Leonie Brinkema ordering a breakup of the corporation.

Accusations against Google include its alleged dominance in the advertising technology market by combining tools for publishers and advertisers, which positions Google as a “privileged middleman.”

Google has denied these allegations, stating it is not obliged to share any technological advantages with competitors and claims its products are compatible with those provided by others.

The DOJ claims Google controls 91% of the ad server market, over 85% of ad networks, and more than half the ad exchange market, while Google asserts its share is 30% or less, considering broader advertising avenues like social media.

Potential witnesses include Google competitors Trade Desk and Comcast, alongside publisher firms like PubMatic, highlighting the advertising technology’s significant influence on news organizations. A Northwestern University study revealed that one-third of U.S. newspapers have closed or sold since 2005, linking this decline to advertising market consolidation.

Justice Department antitrust chief Jonathan Kanter stated, “Journalism is under threat in large part due to consolidation in the advertising market,” at an event hosted by the Open Markets Institute.

Current or former executives from companies like News Corp, Daily Mail, and Gannett, are expected to testify. Google emphasizes its support for small businesses and publishers, warning that a breakup would hinder innovation, increase advertising costs, and complicate growth for small companies.

The trial will also examine Google’s perspective on its advertising technology, with testimonies from more than two dozen current or former employees, including YouTube CEO Neal Mohan and a former advertising executive at Google.