Google is facing accusations from the US Department of Justice (DoJ) of suppressing competition to gain dominance in the display advertising market, driving up costs for publishers and advertisers.
The claims emerged on the first day of a landmark antitrust trial at a federal court in Alexandria, Virginia.
“Google is not on trial because they are big, but because they leveraged that size to crush competition,” stated Julia Tarver Wood, an attorney from the DoJ’s antitrust division, in her opening remarks. The trial’s start comes on the heels of a separate ruling where a federal judge determined Google violated antitrust laws with its search engine monopoly. Google’s parent company, Alphabet, plans to appeal that decision.
Prosecutors argue that Google dominates the digital advertising ecosystem that powers over 150,000 ad sales per second on websites, employing aggressive tactics to eliminate competition through acquisitions, customer lock-ins, and tight control over transaction processes in the ad market.
Tim Wolfe, a Gannett advertising executive, testified that his company had relied on Google’s publisher ad server for around 13 years due to a lack of viable alternatives.
In Google’s defence, lead attorney Karen Dunn argued that the DoJ’s case relies on “ancient history.” She noted that Google now faces robust competition from companies such as Amazon and Comcast as ad spending shifts towards apps 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.”
The trial, presided over by US District Judge Leonie Brinkema without a jury, is expected to span several weeks. Should Google be found in violation of antitrust laws, the judge will later consider a request from prosecutors to compel the company to divest Google Ad Manager, a platform encompassing its publisher ad server and ad exchange.
Google’s ad tech tools contributed $20 billion, or 11 per cent, of its revenue in 2020, and generated approximately $1 billion, or 2.6 per cent, of operating profit, according to Wedbush Securities analysts.