Google (Photo: Shutterstock)
Alphabet’s Google is set to go on trial in a second antitrust case next week, with the U.S. Justice Department questioning how the search giant monetizes advertising through a system that prosecutors say harms news publishers.
The case is part of the Biden administration’s effort to rein in Big Tech through antitrust law, and follows a major Justice Department victory in a separate lawsuit on Aug. 5, when a judge found that Google illegally monopolized online search.
While that case focused on Google’s ubiquitous search engine, the trial that begins in Alexandria, Virginia, on Monday will focus on Google’s less visible technology that connects website publishers and advertisers.
Those advertising tools contributed more than 75 percent of Google’s $307.4 billion in advertising revenue last year.
“Google is by far the largest seller of advertising in the world. It affects every sector of the industry, if not directly, then at least indirectly. Everyone has a stake in Google in one way or another,” said Brian Wieser, an advertising consultant and financial analyst.
The Justice Department and a coalition of states will try to show that Google violated U.S. antitrust law in its digital advertising business. A victory by the states and the Justice Department would set the stage for them to ask U.S. District Judge Leonie Brinkema to order the company broken up.
Antitrust regulators accuse Google of dominating markets for the technology behind website ads by linking its tools for publishers and advertisers, giving it a “privileged position as a middleman.”
Google has denied the allegations, saying it is not obligated to share technological advantages with rivals and that its products are interoperable with those offered by competitors.
The Justice Department alleges that Google controls 91 percent of the market for ad servers, where publishers offer advertising space, more than 85 percent of the market for ad networks, which advertisers use to place ads, and more than half of the market for ad exchanges.
Google says its share of those markets is 30 percent or less when including advertising on social media, streaming TV and apps, and says the Justice Department’s narrow focus on website ads obscures the fierce competition it faces as those categories grow.
Google’s advertiser competitors, such as the Trade Desk and Comcast, and publisher competitors, such as PubMatic, are on the list of potential witnesses.
The case will also highlight how advertising technology has affected news organizations. One-third of U.S. newspapers
have been closed or sold since 2005, according to a Northwestern University study published last November.
“Journalism is threatened in large part because of consolidation in the advertising market,” Justice Department antitrust chief Jonathan Kanter said at an event in June hosted by the Open Markets Institute, an antitrust advocacy group.
Current or former executives of News Corp, the Daily Mail and Gannett, which is also suing Google, will be allowed to testify at the trial.
Google has targeted small businesses and publishers, some of which it plans to call to testify at the trial. A breakup would “slow down innovation, increase advertising costs and make it harder” for small businesses to grow, Google said.
How Google viewed its advertising technology will be a key focus at the trial, with possible testimony from more than two dozen current or former employees and executives, including YouTube CEO Neal Mohan, a former Google advertising executive.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: September 4, 2024 | 23:29 IS
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