Google is defending itself in court against the U.S. Department of Justice for the second week of an antitrust trial over its alleged monopoly in online advertising.
The trial, which began on September 9, is tied to a lawsuit from the DOJ and eight states alleging that Google violated antitrust laws by creating an ad tech monopoly, particularly with its 2008 purchase of ad buying platform DoubleClick. The case is separate to another Federal case that took place last month and found Google guilty of operating an online search monopoly.
This isn’t Google’s first tussle with antitrust law; the tech giant has faced scrutiny from European regulators for similar reasons. While Google overturned a €1.5 billion ($1.7 billion) fine from a 2019 ruling regarding advertising competition this week, many of the antitrust and monopoly charges were upheld.
“Google, and Big Tech in general, have been the white whale of the U.S. antitrust agencies,” said Jennifer Driscoll, Robinson and Cole counsel and co-chair of the antitrust and trade regulation team. “Now Google is besieged basically on both sides of the pond.”
DespiteGoogle acquiring DoubleClick 16 years ago, the U.S. government is only now bringing legal action against the dominance that purchase has afforded it in digital advertising.
According to Arielle Garcia, director of intelligence at ad tech watchdog Check My Ads, “What we’ve seen is a growing realization from regulators domestically and internationally of the pervasiveness of Google’s dominance and the extent of the resulting harms.”
She added that Google controls the information economy through search and advertising, and there is a legitimate argument that it has stifled competition and innovation.
“It’s that realization of the amount of power that Google has over all elements of the industry,” she said. “When digital advertising is effectively the business model of the internet, that impact is quite large.”
The government’s case
The Justice Department and the States will have to prove that Google “willfully acquired [competitors] to maintain [monopoly] power,” versus its dominance being “a result of Google having a superior product,” Garcia said.
Specifically, the DOJ will have to prove that Google monopolized its advertiser ad network, publisher ad servers and the ad exchange market, and unfairly tied Google Ad Manager into its ad exchange.
The last claim is the most nuanced. Google will need to be found guilty of linking separate products, conditioning the sale of one product on the purchase of another and having the market power to restrain a substantial amount of competition.
Much of this case can be linked to the Google search monopoly case, Garcia said. Because Google extended search advertising demand to the open web display market via Google Ads, brands are often forced into using its tools. In return, Google’s pool of advertisers grows so large, no publisher can avoid working with it.
As for squashing competition, Google acquired DoubleClick, InviteMedia and AdMeld, giving it a stronghold on both sides of the market. That means “they can effectively do whatever they want,” Garcia said. “That’s where all of the auction manipulation evidence starts to come in.”
Google’s Defense
While Google is the world’s largest online advertising platform, it will argue that it isn’t the only player in the market.
“You can’t just look at one little piece of the world,” said a senior publishing executive who asked to not be named. “We have a lot of share, but if you look at the much larger market, there are places where Google has no share in the aggregate.”
Google will argue that many of its actions were necessary. Anti-competitive behavior was done to protect the quality, privacy and safety of its users. For example, it wrote in its arguments that it developed header bidding to protect user privacy. If the DOJ forces Google to give others access to its tools, it will stifle its own innovation.
“For anyone that actually pays attention to any number of the scandals or lawsuits that Google faces, it’s kind of mind-boggling how they were able to write that with a straight face,” Garcia said.
Google will also argue that advertisers and publishers have choice in a robust ad tech ecosystem, and that its tools are dominant because they are superior.
“If your success is the result of hard work and innovation, and you have a better product, that is permissible under antitrust law,” said Driscoll. “Antitrust law is not meant to punish success. It’s meant to punish exclusionary conduct that has anti-competitive effects in the market.”
The potential repercussions
If Google is found guilty, the DOJ could ask for structural changes, such as divesting its sell-side business. Other changes would put an end to Google’s alleged exclusivity over the ad market.
But the senior publishing executive said that while breaking up Google would be good for ad tech companies, it isn’t necessarily the best thing for publishers.
“How do we make sure that if Google is found guilty, those remedies really are good at creating a fairer, better market for all players, and not just other ad tech companies?” they added.
There’s also a chance that Google is found not guilty, considering it is not as dominant in online advertising as it once was, the executive added.
“They’re still very powerful, but they have a lot of competition,” they said. “It’s interesting that this case is happening at a time when they’re actually the least dominant they’ve been in a while.”
Regardless of the outcome, the case will “kickstart or reinvigorate the conversation about regulation and the need for real oversight,” Check My Ads’ Garcia said.
“It’s a daunting time for Big Tech, and whatever remedy is ordered by the District Court of the District of Columbia may be a harbinger of what other companies will face,” Driscoll said.
This article originally appeared on Campaign US.
