Google and DOJ engage in a second round of their antitrust battle, now focusing on advertisements

Google and the Justice Department are preparing for another courtroom battle, this time regarding Google’s alleged monopolistic behavior in the advertising technology market. The Department of Justice (DOJ) recently celebrated a victory in its search antitrust case against Google, where a federal judge agreed that the company had illegally monopolized the online search market. Now, the two parties will face off before a different judge in Virginia to determine whether Google has also unlawfully monopolized the advertising technology market.

This legal proceeding is crucial for both Google and the government. While a loss in either case would not spell the end for Google, a second victory for the DOJ would provide significant momentum in its efforts to curb Big Tech monopolies. Moreover, it would validate the DOJ’s focus on vertical integration and the ways in which different business lines can be leveraged to enhance a company’s dominance.

The DOJ’s argument revolves around Google’s alleged illegal monopoly of the ad tech tools market. This includes the demand side of ad networks, the supply side of publisher ad servers, and the exchanges that facilitate transactions between the two. According to the government, Google engaged in a campaign to control and tax digital advertising transactions over the course of 15 years. It tied its tools together, excluded competitors, manipulated ad auctions, and placed unfair conditions on accessing its tools to cement its monopolies.

Google, on the other hand, claims that the government is seeking to punish it for creating valuable tools that benefit publishers and advertisers. It argues that the government’s view of the market fails to acknowledge the vigorous competition it faces and the innovations it has developed to make its tools attractive to customers. Google asserts that it has not engaged in any anti-competitive practices and that its actions are necessary for efficient operation in the digital advertising landscape.

The trial will involve highly technical aspects of the ad tech market, which may pose challenges for the judge and layperson observers. Therefore, the ability to tell a convincing story will play a crucial role in swaying the court’s decision. Both parties will present witnesses from the advertising and publishing industries to support their respective arguments. Witnesses may include industry leaders such as YouTube CEO Neal Mohan, The Trade Desk Chief Revenue Officer Jed Dederick, and BuzzFeed Chief Business Officer Ken Blom, among others.

A significant point of contention in the case revolves around whether the government is seeking to force Google to collaborate with its competitors. Historically, US antitrust law does not require firms to engage with rivals, as established by the Supreme Court in Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko. Adhering to this precedent, the law is generally unfavorable for the government when it comes to litigating Google’s product design choices. To combat this disadvantage, the government will attempt to highlight Google’s “shenanigans” and short-term sacrifices made to maintain its dominance in the market.

One such “shenanigan” that the government will focus on is Google’s handling of header bidding. Publishers discovered that sending ad calls to multiple ad exchanges before Google’s increased competition for their inventory. In response, Google introduced “Open Bidding,” a system that required publishers and exchanges to provide insight into how rival exchanges bid. This move allegedly allowed Google to gain a competitive advantage, extract more fees, and exclude competing platforms from reaching their own publishers.

In arguing against Google’s refusal to collaborate with rivals, the government may draw parallels with the Supreme Court case Aspen Skiing. In this case, a company acquired three out of four mountains in Aspen, Colorado, and subsequently discontinued a pass arrangement that provided access to all four mountains. Although there is no duty to deal, the court ruled in favor of the plaintiffs, stating that the company had sacrificed short-term profits to harm its competitor and expand its own dominance.

If the ruling goes against Google, it could significantly alter the way businesses operate within the industry. The breakup of Google’s ad tech stack would require publishers and advertisers to find alternatives that seamlessly integrate and work together. While this may lead to initial logistical challenges, the government’s hope is that it would ultimately revitalize competition in the advertising technology industry. Some advertisers and publishers may feel relieved to loosen their dependence on Google and explore new opportunities.



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