Alphabet’s Google sought to dominate all aspects of online advertising technology by controlling both competitors and customers, according to a Justice Department prosecutor as the tech giant’s latest antitrust trial began in Alexandria, Virginia, on Monday. Prosecutors argue that Google has maintained control over the infrastructure that finances the flow of news and information across websites, facilitating more than 150,000 online ad sales every second.
Julia Tarver Wood, an attorney from the Justice Department’s antitrust division, accused Google of using classic monopoly-building tactics. She claimed that Google eliminated competitors through acquisitions, locked customers into its ecosystem, and controlled the way transactions occurred in the online ad market. “Google isn’t on trial because of its size,” Wood said. “It’s on trial because it used that size to crush competition.”
U.S. District Judge Leonie Brinkema is presiding over the case, and after a multi-week trial, she will issue a ruling. Google’s lead attorney, Karen Dunn, countered by stating that the Justice Department and a coalition of states built their case on “ancient history,” pointing to a time when Google was still developing its tools to connect with competitors. Dunn emphasized that Google’s tools are now interoperable with those of its rivals and argued that the company faces competition from other tech firms such as Amazon and Comcast, especially as digital ad spending shifts toward apps and streaming video.
Dunn likened the case to a time capsule filled with outdated technology like a BlackBerry, an iPod, and a Blockbuster Video card. She compared the allegations to those Google recently defeated in a separate search monopoly case.
During the trial, prosecutors aim to demonstrate that Google used its dominant position in technology for publishers and advertisers to prevent them from using alternative tools and to undercut bids from competing products. Tim Wolfe, an advertising executive at Gannett, testified that his company has relied on Google’s publisher ad server for about 13 years, citing a lack of other viable options.
If Judge Brinkema rules that Google violated the law, she will later address the prosecutors’ request to force Google to sell off its Google Ad Manager, which includes the publisher ad server and its ad exchange.
Shares in Alphabet dropped 1.7% in the afternoon as the trial continued. According to Wedbush research, Google’s ad tech tools generated $20 billion in 2020, making up 11% of the company’s gross revenue and about $1 billion, or 2.6%, of its operating profit. Ad Manager alone accounted for 4.1% of revenue and 1.5% of operating profit. More recent figures from court documents were redacted.
This case is one of several targeting alleged monopolistic practices by Big Tech companies. The Justice Department recently won a ruling against Google in another case concerning its dominance in online search. The department is also suing Apple, while the U.S. Federal Trade Commission is pursuing cases against Meta Platforms and Amazon.
