(Alexandria) The second major trial against Google in a year began Monday, with the U.S. government accusing the tech giant of dominating online advertising and stifling competition.
The trial in federal court in Virginia comes after the one over online search, which ended last month with a resounding verdict: the judge found that Google exercised an illegal monopoly in this sector.
This new battle, also brought by the US Department of Justice, focuses on advertising technology, that is, the complex computer system that determines which ads are seen by which Internet users and how much they cost brands.
The US government accuses Google in particular of controlling the market for advertising banners on websites, including those of many media outlets.
“This technology may be modern, but the practices [de Google] “are as old as the hills,” said government representative Julia Tarver Wood at the opening of the debate.
In her opening remarks, she said Google had used its financial muscle to acquire potential rivals and corner the market, leaving advertisers and publishers with no choice but to use its technology.
PHOTO STEPHANIE SCARBROUGH, ASSOCIATED PRESS
The lawsuit, brought by the U.S. Department of Justice, focuses on advertising technology and is being heard in a court in Virginia.
Through these acquisitions, “Google has used its monopoly to create a series of new tools for online advertising that are necessary to keep the Internet alive,” the prosecution’s representative said.
“The content publishers were understandably furious and we’re going to prove that there was nothing they could do about it,” she continued.
The U.S. government is seeking to get Google to divest parts of its advertising technology business.
“Winners and losers”
Google lawyer Karen Dunn has called out the Justice Department’s misinterpretation of the law as a way to pick “winners and losers” in the online advertising market.
She argued that an unfavourable ruling would benefit other tech heavyweights, such as Microsoft, Meta and Amazon, whose market shares are already “growing while Google’s is falling”.
The company claims the case is based on an outdated version of the internet, ignoring the current context, where ads are also placed in search results, mobile apps and social networks.
But even though the market at issue in this lawsuit is small compared to the broader advertising ecosystem, it is “critical to the survival of a large number of important sources of information for the public,” said Evelyn Mitchell-Wolf, an analyst at Emarketer.
“I’m not sure I have much sympathy” for the argument that publishers should settle for fewer options to generate revenue, she added.
The first witness called at the hearing was the vice president of the newspaper publisher Gannett (USA Today (notably) Tim Wolfe argued that his group saw “no alternative option” to Google.
The trial is expected to last at least six weeks and involve dozens of witnesses, before Judge Leonie Brinkema. Her decision on whether Google violated competition law is expected to be made several months after the trial.
If convicted, another trial will decide what the consequences will be for the world’s largest online advertising company.
Analysts at Wedbush Securities said the economic impact of the lawsuit will be limited for Google, regardless of the outcome. The business that the government could force to sell represented less than 1 percent of the company’s operating income this year, they said.
The Emarketer firm estimates Google’s global market share in digital advertising at nearly 28% in 2024, ahead of its neighbor Meta (Facebook, Instagram) and its 23%, Amazon (9%) and ByteDance’s TikTok platform (Douyin in China) (7%).
Similar investigations into Google’s dominance in advertising technology are underway in the European Union and the United Kingdom.
As for the search engine monopoly case, it has entered the appeals phase. The US government is expected to propose an overhaul of Google’s business in the coming weeks.