Judge hears final arguments in Google ad-market antitrust case

ALEXANDRIA, Va. (CN) — Prosecutors for the U.S. Department of Justice Monday urged a federal judge to convict Google of violating antitrust law, charging that the tech firm uses its dominance in online advertising to assert control over customers and competitors alike.

“Google is not here because of its size,” said Aaron Teitelbaum, senior litigation counsel for the Justice Department, during final arguments in a case that revolves around the dotcom’s dominance in the advertising market. “We are here to hold Google accountable for antitrust conduct.”

But attorneys for Google countered that the Justice Department made its case by gerrymandering market definitions and ignoring exculpatory evidence that the dotcom’s prices are either in line with or lower than rivals.

Google’s behavior is the “exact opposite of a monopoly,” said Karen Dunn, co-chair of the Paul Weiss litigation department and lead attorney for Google. She added that there is no evidence Google used its power to increase prices.

Spectators packed a courtroom to hear attorneys make final arguments before U.S. District Judge Leonie Brinkema, a Bill Clinton appointee, who took the case under advisement.

Throughout the morning, Brinkema peppered both legal teams with questions, first challenging the Justice Department’s narrative that Google corners customers into using its ad tools. What if, the judge asked, someone developed a widget. It’s more expensive than other widgets, but “customers want to buy it,” she pressed.

That’s not what Google is doing, Teitelbaum responded. As opposed to developing the best products, the people at Google “pull levers” to prod customers into buying their products. The department has accused Google of controlling the dominant publisher ad sever, the dominant advertiser ad network, and the dominant ad exchange in between.

Later, Brinkema jumped in when Dunn asserted that the Justice Department attorneys had cherrypicked quotes and taken them out of context to make their case. The notable example came from a then-Google executive, who described misgivings about whether Google was too dominant a presence: “The analogy would be if Goldman or Citibank owned the NYSE [New York Stock Exchange].”

Dunn pointed out that in the memo, the author described his remarks as “late-night jet-lagged ramblings.”

But Brinkema warned that the argument verged into “dangerous territory” and pointed to testimony at trial in which Google witnesses were asked about their practice of labeling emails and memos as privileged while shutting off history in chat records.

Google is currently entangled in two antitrust cases. The first, involving the firm’s search engine, ended with a conviction with remedies yet to be decided. This case focuses on how Google runs its advertising arm. Julia Tarver Wood, senior litigation counsel for the Justice Department, characterized the trial as “two different versions of reality.” She asked the judge to apply the law “exactly as written.”

The outcome could upend the balance of power in Silicon Valley.

The Justice Department sued Google in 2023 charging that the dotcom “corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers and brokers to facilitate digital advertising.”

The department maintains that by 2015, Google’s publisher ad server had reached a 90% market share.

But the tech giant has also invested billions to develop a suite of tools uniquely suited to serve customers, its attorneys contend. “Prices have never gone up, even as quality, publisher revenue, and advertiser return on investment have all increased,” the company said in court filings.

Google’s legal team also contends ad tech operates as atwo-sided market, one that exists when buyers and sellers meet to exchange a product or service. The U.S. Supreme Court weighed in on two-sided markets in the 2018 case Ohio v. American Express.  There, the court found that the credit card company operated within a two-sided platform and prosecutors failed to prove the credit card company’s practices were anticompetitive. Accordingly, the concept could factor into the decision — although in court, Brinkema questioned whether it would make a difference in this case.

If the judge rules that Google acted unlawfully to monopolize the U.S. ad market in violation of antitrust laws, she could order divesture of Google advertising features.

Separately, a judge in Washington, D.C., convicted the tech giant of antitrust violations in the operation of its search engine. Last week, the Justice Department said Google should be forced to divest key parts of its business, such as Google Chrome and its Android operating system, to remedy its illegal monopoly.