Alexandria (United States) (AFP) – Google faced its second major antitrust trial in less than a year on Monday, with the US government accusing the tech giant of unfairly dominating online advertising and stifling competition. The trial in a Virginia federal court followed a separate case where a judge last month found Google’s search business to be an illegal monopoly. This new battle, also brought by the US Department of Justice, focuses on ad technology — the complex system determining which online ads people see and their cost.
The US government specifically alleges that Google controls the market for publishing banner ads on websites, including those of many creators and small news providers. This has meant, the lawyers argued, that Google can both charge higher prices to advertisers and send less revenue to publishers such as news websites, many of which are struggling to stay afloat. “This technology may be modern, but the practices (shown by Google) are as old as monopolies themselves,” Julia Tarver Wood, a lawyer for the Department of Justice, told a packed courtroom.
In her opening statement, Wood said Google had used its financial power to acquire potential rivals and corner the ad tech market, leaving advertisers and publishers with no choice but to use its technology. Through acquisitions, “Google used its monopoly to make a new set of ad tech tools that are necessary to keep the internet alive,” she added. As their revenue dwindled, “publishers were understandably furious and the evidence will show that they could do nothing,” she said.
According to the US government, websites show more than 13 billion display ads every day, bringing in roughly $12 billion to publishers, much of which goes through Google’s ad tech. The US government is seeking to have Google divest parts of its ad tech business.
Google’s lawyer Karen Dunn dismissed the allegations as an attempt by the government to pick “winners and losers” in a diverse market. She insisted that the display ads under the microscope are just a small share of today’s ad tech business. The plaintiffs ignore ads that are also placed in search results, apps and social media platforms and where, taken as a whole, Google does not dominate, she said.
“The plaintiff’s case is a little like a time capsule,” said Dunn in her opening statement. She warned that if Google were to lose the case, the winners would be other tech giants such as Microsoft, Meta, or Amazon, whose market share in online advertising “is ascendent as Google’s share is falling.” The case should also be dismissed due to US legal precedent that has refuted similar arguments in previous antitrust cases, she added.
The first witness called by the US government was Tim Wolfe, an executive from Gannett newspapers, the publisher of USA Today and hundreds of US local news providers. He told the court that his company saw “no alternative” to Google. Its ad tech tools offered access to advertisers that other tech providers could not match, he said.
The trial is expected to last at least six weeks and call on dozens of witnesses, with Judge Leonie Brinkema presiding. Her decision on whether Google has broken antitrust law will come months after the trial. If found at fault, a separate phase of the trial would decide how Google should comply with the judge’s conclusion. Similar investigations into Google’s dominance of the ad tech business are ongoing in the European Union and Britain. In another case, Google settled with France’s competition authority in 2021 and was given a 220-million-euro (242-million-US-dollar) fine.
© 2024 AFP
