Google Faces New Antitrust Trial Over Ad Practices
Justice Department and States Challenge Digital Advertising Dominance
Google (Alphabet Inc., GOOGL.O) is set to go to trial next week in a second antitrust case, where the U.S. Department of Justice will scrutinize the company’s advertising practices. Prosecutors argue that Google’s approach to monetizing ads adversely affects news publishers.
This case is part of the Biden administration’s broader initiative to regulate major tech companies through antitrust laws. It follows a significant victory for the Justice Department on August 5, when a judge ruled that Google had unlawfully monopolized the online search market.
While the previous case centered on Google’s widely used search engine, the upcoming trial starting Monday in Alexandria, Virginia, will examine Google’s less visible technology that links website publishers with advertisers. These advertising tools were responsible for a significant portion of Google’s revenue, with more than 75% of its $307.4 billion in earnings last year coming from advertising.
“Google is by far the largest advertising seller globally,” remarked Brian Wieser, an advertising consultant and financial analyst. “They have a presence in nearly every aspect of the industry, whether directly or indirectly. Everyone has some stake in Google in one way or another.”
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The Justice Department, along with a coalition of states, aims to prove that Google violated U.S. antitrust laws with its digital advertising practices. If they succeed, it could lead them to request U.S. District Judge Leonie Brinkema to mandate a breakup of the company.
The antitrust regulators argue that Google has monopolized the market for technology used in website advertising by bundling its tools for publishers and advertisers, thereby establishing an unfair “privileged position” as the intermediary.
Google has refuted these allegations, asserting that it is not obligated to share its technological benefits with competitors and that its products are compatible with those of other companies.
The Justice Department contends that Google dominates 91% of the ad server market, where publishers sell ad space, over 85% of the ad network market, which advertisers use to place ads, and more than half of the ad exchange market.
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