Google is back in court to answer accusations that it has cultivated an illegal monopoly on the lucrative digital ad market, marking the second attempt by the US government to possibly break up one of the most profitable companies in the world.
This comes a little over a month after US Judge Amrit Mehta ruled in a separate case that Google did in fact resort to illicit means to preserve its dominant search engine.
The new antitrust case is being brought in the Eastern District of Virginia by the US Department of Justice and 17 state attorneys general, all of whom are alleging that Google’s iron grip on the market for ad-tech software used to buy and sell internet ads is illegal.
U.S. District Judge Leonie Brinkema will hear opening statements on Monday in a trial that’s expected to last four weeks. There is no jury – leaving the tech firm’s fate in the hands of witnesses and Judge Brinkema.
Google’s CEO Sundar Pichai (pictured) testified in the last antitrust trial that led to an unfavorable ruling for the company. It’s unknown if he’ll be taking the stand again
The trial will focus on the open web display ad market and the tools powering ad auctions that happen in the milliseconds it takes for a webpage to load.
Google is a behemoth in this market, owning a publisher ad server that almost all online publishers use, from news websites to independent bloggers.
With it, they can manage their ads and connect the tools needed for advertisers to buy ad space.
Crucially, Google also provides the ad exchange that connects publishers and advertisers.
The DoJ alleges this trifecta has helped the company stamp out rivals in the online advertising business, while also inflating advertising costs and cutting revenue for publishers.
The government wants to break up this all-encompassing tool, called Ad Manager, which is the combination of Google’s publisher ad Server and ad exchange, and delivered Google an operating profit of $368 million in 2020.
If the judge rules against Google, she could force it to sell off Ad Manager, destroying a consistent source of revenue for the company
If the judge rules against Google, she could force it to sell off Ad Manager, destroying a consistent source of revenue for the company and broadening the landscape of the online advertising industry.
The DoJ is pushing for the decision.
Google has led a ‘campaign to condition, control, and tax digital advertising transactions over 15 years,’ the government’s lawyers said in a recent court filing.
‘This campaign was exclusionary, anticompetitive, and mutually reinforcing.’
Among the allegations is how Google enticed businesses with shady dealings, and enforced its monopoly by forcing companies into compliance.
Google disagrees, arguing that it’s been rewarded with sky high profits because of its innovations. Their lawyers say the DoJ is out of touch with the reality of the private sector.
A ruling against Google could effectively eliminate billions worth of revenue it books every year from its ad tech business. Pictured: The court in the Eastern District of Virginia, where the trial is taking place
‘In court, we will show that ad buyers and sellers have many options, and when they choose Google they do so because our ad tech is simple, affordable, and effective. In short – it works,’ Google wrote in a blog post on Sunday.
Judge Brinkema criticized Google last month for this earlier corporate policy that allowed automatic deletion of employee chat records, saying it was ‘not the way in which a responsible corporate entity should function.’
‘An awful lot of evidence has already been destroyed,’ she said.
The DOJ has asked the judge to infer that the evidence destroyed was unfavorable to Google, with the company arguing the government knew about its auto-delete policy years before bringing it up now.
The judge opted not to formally sanction Google for this, but said it would factor into which witnesses were credible or not.
