Reem Makari
Sep 7, 2024

Everything you need to know ahead of Google’s antitrust trial

With the fate of the digital advertising industry hanging in the balance, understanding its background and potential consequences is essential.

Everything you need to know ahead of Google’s antitrust trial

The most significant antitrust trial of the century is set to take place next week on 9 September, potentially altering the fate of the digital advertising landscape forever. 

The legal battle between Google and the US Department of Justice (DOJ) will look at accusations against the tech giant, claiming that it has abused its dominance of digital advertising technology and undermined competition.

As the trial approaches, it’s important to understand the background of this case and why it is so significant.

The history behind Google’s alleged monopoly 

This case will focus on Google’s alleged monopoly over adtech tools, looking at three monopolisation claims in particular—advertiser ad networks, publisher ad servers, and ad exchanges.

It follows a previous high profile trial between the DOJ and Google which claimed that the tech giant has created a search ad monopoly by manipulating ad auctions to increase revenue by charging advertisers inflated prices.

In August, a federal judge ruled that Google has violated US antitrust law with its search and text-based advertising business. This, along with the current trial taking place next week, extends Google’s monopoly power across five areas making it one of the largest antitrust cases in recent history. 

The biggest one prior to that is the case against Microsoft in the 1990s which was accused of monopolising just two distinct product markets, PC Operating System and browser markets. 

This also isn’t the first time that Google has been under scrutiny. In the UK, the Competition and Markets Authority (CMA) has also been investigating Google’s business practices and its dominance on the digital advertising sector since May 2021 as part of its broader efforts to regulate Big Tech and ensure fair competition across digital markets.

The DOJ vs Google’s defence 

According to a briefing call on Google vs. DOJ trial from digital advertising watchdog, Check My Ads, the DOJ’s claim is that Google’s acquisition of DoubleClick in 2009 has given it control over these key pieces of the adtech system and has enabled the company to manipulate prices and stifle competition. 

This, in return, has led the company to allegedly harm small publishers, local advertisers, and competitors by skewing the market in its favour. To succeed in this case, the DOJ will have to prove Google’s monopoly power in the relevant market, that it wilfully acquired or maintained this power, and that the monopoly wasn’t simply a result of better products. 

Google’s defence on the other hand is that the markets defined by the DOJ are too narrow and not representative of the real market, claiming that it is a two-sided market rather than the three that are being focused on in the trial. 

This is a similar defence that the tech giant used in the former search trial which Check My Ads’ Director of Intelligence, Arielle Garcia, refers to as the “jazz hands approach” which was not successful in the search trial and will likely not be successful in this trial. 

Additionally, Google claims that its exclusionary practices are justified to ensure quality, privacy, safety, and security for all parties. However, Check My Ads’ briefing call claims that there are internal documents from Google that contradict these claims and show underinvestment from the company in privacy measures. 

Currently, Google is fighting against having industry experts like AppNexus founder Brian O’Kelley testify in the trial as the DOJ built its case, arguing that none of the third-party competitor witnesses have the “foundation of knowledge, expert qualifications, or done the required economic analysis” to determine if Google is a monopolist and that it has harmed competition. 

Jeff Green, founder and CEO of The Trade Desk, which is on the list of the companies that Google doesn’t want to testify in the trial, argued against this motion filed by Google on LinkedIn, stating that the open internet and expert voices do matter. 

Green said: “I view this as a legal Hail Mary pass (not likely to work) and a big strategic mistake. Telling the open internet experts that they are not experts adds insult to injury. But it also underlines that cavalier and hubris-led mindset that has taken Google from “do no evil” to “win at all costs” over the last decade.

“Google argued that the companies and individuals who were victim to unfair auctions and tactics are not “competent to testify” and know nothing about Google’s ‘dominant’ or ‘anticompetitive effects’. On the contrary—the open internet (and its experts) matters.”

Why is the trial so significant and what are the potential implications?

The implications of this case could have a significant impact on the digital advertising world with Google potentially facing significant penalties, including the possibility of having to break up its adtech business, undo acquisitions, and adopt new business practices to allow for fair competition. 

However, if Google wins the case, then it could reinforce the company’s dominance and status quo and regulatory bodies and governments would prove to have less control and power over tech giants that are taking control over the internet landscape. 

There are some industry experts, however, such as Precis Digital’s managing director Jess Merry that argue that the ruling with Google’s search antitrust case may not have a significant short-term impact on the ad ecosystem and that regulators need to focus on broader issues like consumer protection and AI development. 

Merry said: “We already know Google has a monopoly and it’s hard to see a world where they don’t. Users who prefer Google will continue to access and use Google, just as those who have a preference for Microsoft will continue to access and use Microsoft.”

Still, the outcome of the trial will make a significant impact on the internet ecosystem, affecting digital advertising, journalism, and online competition, in the coming years, and as it unfolds over the next few weeks, the world will be watching closely. 

(The story first appeared on Campaign's sister publication Performance Marketing World.)

Source:
Performance Marketing World

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