Google’s ad tech monopoly faces historic antitrust challenge

On Monday, the US Department of Justice and eight states completed final hearings in a landmark antitrust case accusing Google of monopolizing the advertising technology market. The result could change the tech giant’s business model and set a precedent for regulating big tech companies.

News. Justice Department lawyers argue that Google abused its dominance in online advertising tools by bundling its products to block competitors and stifle innovation. Aaron Teitelbaum, a government attorney, likened Google’s market power to being a “one, two, three times monopoly.”

• Google’s top lawyer, Karen Dunn, dissented, calling the company an innovator in a competitive market. She said the government had failed to prove its case, saying evidence showed Google’s actions benefited advertisers and publishers.

Why do we care? If Judge Leonie Brinkema sides with the government, the decision could destroy Google’s $31 billion ad tech business and set the legal framework for antitrust cases against other tech giants such as Amazon, Meta and Apple. This will certainly be a major issue for all advertisers as you won’t have access to the amount of data that Google provides for reporting and optimization.

Zoom in. The case centers on Google’s control over tools used to buy and sell advertising online.. The Justice Department says the company has an 87% market share in advertising technology, allowing it to make excessive profits at the expense of publishers and advertisers.

• Google’s acquisition of DoubleClick in 2008 is key, as the government argues the deal cemented its dominance.
• Witnesses included YouTube chief Neil Mohan and executives from publishers such as News Corp, who testified that Google’s actions were harming competition.

Between the lines: During closing arguments, Judge Brinkema raised thorny questions, including about Google’s policies that led to the deletion of internal communications. However, she did not make it clear how she could rule.

• During one conversation, she wondered whether market dominance might simply reflect the winning of the best product. The Justice Department countered that Google’s conduct went beyond fair competition.

Rates: A ruling against Google could force the company to exit its ad tech business and impose stricter regulations.

What’s next: Judge Brinkema’s decision is expected in the coming months. Meanwhile, regulatory battles in the tech industry are escalating:

• The Department of Justice has sued Apple over antitrust laws.
• The Federal Trade Commission is pursuing cases against Amazon and Meta for allegedly stifling competition.

What they say:

• Mr. Teitelbaum (DOJ): Google used its tools to enrich itself by “killing” potential challengers to its dominance.
• Miss Dunn (Google): The government’s case “simply doesn’t hold water,” highlighting price cuts and improvements in advertising technology under Google’s leadership.

Bottom line. Resolution could deal a major blow to Google, but it also has the potential to redefine how courts approach tech monopolies in the digital age.

However, this blow to Google could also result in a blow to users if not done correctly. Industry experts have already expressed serious concerns against the backdrop of a possible sale of Chrome:

• Another company will simply fill the monopoly hole that Google will vacate.
• The situation is more difficult for advertisers.
• Another case where government decisions lead to less innovation and more complexity.