### Google Faces Second Major Antitrust Trial: DOJ Targets Ad Tech Monopoly
In September 2024, Google found itself embroiled in its second significant antitrust trial within a year, as the U.S. Department of Justice (DOJ) accused the tech powerhouse of monopolizing the online advertising sector. The trial commenced at the Albert V. Bryan U.S. Courthouse in Alexandria, Virginia, concentrating on Google’s dominance in the ad tech industry, particularly via its Google Ad Manager platform. This case could have extensive implications for the digital advertising landscape and the future of competition within the tech sector.
#### The Core of the Case: Google Ad Manager
At the heart of the DOJ’s argument is Google Ad Manager, a platform that links publishers’ ad servers with ad exchanges. Google Ad Manager was introduced following Google’s $3 billion acquisition of DoubleClick and AdX in 2008. The DOJ asserts that this acquisition enabled Google to seize control of the ad tech market by connecting its publisher ad servers to its ad exchanges, effectively coercing publishers into paying elevated fees. The DOJ contends that Google Ad Manager currently caters to 90% of publishers utilizing ad tech tools to monetize their online ad inventory, endowing Google with monopoly power over the sector.
In her introductory statement, DOJ attorney Julia Tarver Wood asserted that Google’s acquisitions, including DoubleClick, empowered the company to manipulate ad auction regulations to maximize profits while suppressing competition. The DOJ claims that Google has monopolized three critical markets: publisher ad servers, advertiser ad networks, and ad exchanges.
#### Google’s Counterargument: Narrow Market Definitions
Google has refuted the DOJ’s allegations, claiming that the government’s market definitions are excessively constrained. The company highlighted that the Federal Trade Commission (FTC) had previously investigated and sanctioned the DoubleClick merger in 2007 without any stipulations. At that time, the FTC determined that the acquisition was improbable to diminish competition in any pertinent antitrust market.
Nonetheless, the DOJ’s complaint argues that the DoubleClick acquisition provided Google with a dominant position over the tools publishers employ to sell advertising, enhancing its existing advertiser tool, Google Ads. The DOJ affirms that this established the groundwork for Google’s exclusionary practices in the ad tech arena.
#### Possible Solutions: Divesting Google Ad Tech?
The DOJ has suggested various potential solutions to combat Google’s purported monopolistic practices. At the very least, the DOJ has requested the court to mandate Google to divest Google Ad Manager, which might encompass valuable products such as Google’s Display and Video 360 (DV360) platform. In a more drastic outcome, the court could require Google to divest its entire ad tech division.
However, analysts have expressed doubts regarding the practicality of such solutions. The precise value of Google’s ad tech division remains uncertain, with estimates differing significantly. Some analysts propose that Google’s ad tech sector could be valued at as much as $95 billion, which complicates the prospect for any one buyer to acquire it. Terence Kawaja, CEO of Luma Partners, a strategic advisory firm, indicated that Google might need to redistribute its ad tech operations to shareholders instead of executing a sale.
#### Testimony from News Corp: “Held Hostage” by Google
To bolster its case, the DOJ has summoned various witnesses, including publishers and competitors of Google who allege to have suffered from Google’s purportedly anticompetitive behaviors. One of the most impactful testimonies was provided by Stephanie Layser, a former vice president of ad tech for News Corp. Layser testified that in 2017, News Corp stood to lose $9 million if it opted to leave Google’s advertising platform. She described the experience as News Corp being “held hostage” by Google.
Layser clarified that the substantial switching costs and Google’s unwillingness to negotiate made it challenging for publishers to make well-informed purchasing choices. She also indicated that News Corp conducted an internal assessment to determine if it could transition to another ad platform, but the anxiety of losing Google’s ad demand was too significant. By the time she departed from News Corp in 2022, as much as 80% of the company’s revenue was derived from Google’s AdX platform.
#### Google’s Competitors: Struggling to Keep Up
The DOJ also brought in Andrew Casale, president and CEO of Index Exchange, a competing ad exchange. Casale testified that even when Index Exchange lowered its fees to zero, it still could not effectively compete with Google. Casale contended that it is “virtually impossible” to achieve scale in a market that Google dominates, further substantiating the DOJ’s claims of monopolistic conduct.
#### AI’s Role in Future Antitrust Challenges
While the current trial centers on Google’s ad tech operations, the DOJ is also monitoring the company’s expanding reach in artificial intelligence (AI). Democratic senators have urged the DOJ and the FTC to scrutinize the potential anticompetitive threats posed by Google’s generative AI features, such as AI Overviews. Publishers have already expressed concerns that Google’s supremacy in ad tech has adversely affected journalism, and they fear
