The much-anticipated antitrust trial against Google commenced at a federal court in Alexandria, Virginia, with the US Department of Justice (DoJ) accusing the tech giant of leveraging its vast size to crush competition in the digital advertising market.
Julia Tarver Wood, an attorney from the DoJ’s antitrust division, asserted, ‘Google is not on trial because they are big, but because they leveraged that size to crush competition.’ This trial follows a separate ruling where a federal judge found Google had violated antitrust laws with its search engine monopoly. Google’s parent company, Alphabet, plans to appeal this ruling.
Prosecutors claim that Google dominates the digital advertising ecosystem, which facilitates over 150,000 advertisement sales per second on various websites. The company allegedly employs aggressive tactics to eliminate competition through acquisitions, customer lock-ins, and stringent control over transaction processes within the ad market. Tim Wolfe, a Gannett advertising executive, testified that his company heavily relied on Google’s publisher ad server for approximately 13 years due to a lack of viable alternatives.
In defence of Google, lead attorney Karen Dunn contended that the DoJ’s case relies on outdated information. She remarked that Google currently faces substantial competition from companies such as Amazon and Comcast as advertisement spending shifts towards applications and streaming services. Dunn likened the case to ‘a time capsule that, if opened, would reveal a BlackBerry, an iPod, and a Blockbuster Video card.’
Presided over by US District Judge Leonie Brinkema without a jury, the trial is anticipated to last several weeks. Should the court find Google in violation of antitrust laws, the judge will later deliberate on a request from prosecutors to compel Google to divest Google Ad Manager, a platform that includes its publisher ad server and ad exchange.
Analysts from Wedbush Securities indicated that Google’s ad tech tools contributed $20 billion to its revenue in 2020, equating to 11 per cent of its total revenue, and generated approximately $1 billion, or 2.6 per cent, of operating profit.
The outcome of this landmark trial could have significant implications for the future of digital advertising, potentially forcing Google to divest key advertising assets if found in violation of antitrust laws.