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Judge Skeptical of Antitrust Case Over Google Digital Ads

The judge said Google's digital advertising business should not be looked at in a vacuum — and without considering the other advertising behemoth, Facebook.

(CN) --- A federal judge said Thursday she has doubts about a case brought by a consortium of advertisers claiming Google has a monopoly on digital advertising space.

U.S. District Judge Beth Labson Freeman told the plaintiffs they will need to amend their complaints during a motion to dismiss hearing Thursday, finding the relevant market framework chosen by the plaintiffs had problems. 

“This complaint needs to be amended,” Freeman said at the outset of the hearing. “I think Google has made some persuasive arguments that some companies are not included in the relevant market to make it more narrow.”

Specifically, attorneys for Google said the consortium of businesses looking to place digital ads have excluded other digital advertising operations, including Facebook, to make it artificially appear that Google exerts monopolistic power over the market. 

“If digital ad services for Facebook is included in the relevant market analysis, this case is over,” said Google attorney Jonathan Jacobson. “Facebook is the largest display advertiser in the world.”

Dena Sharp, arguing on behalf of plaintiffs, said the question is whether Facebook is an economic substitute for Google in the present instance. That question is for a jury to decide, not a judge at the motion to dismiss phase, Sharp said.

“Is it a reasonable substitute with cross elasticity of demand,” Sharp said. 

Freeman, who continued to express doubt that Facebook should be excluded from market analysis, did agree that allowing the case to proceed in front of a jury was possible despite her skepticism. 

“I think the standard I am to look at is whether the relevant market is plausible, not persuasive,” Freeman said. 

Google not only thinks Facebook should be included in the analysis, but also said the advertising market should be studied holistically --- including traditional advertising outlets like television, newspaper and radio. 

“I am not so worried about radio, television and traditional right now,” Freeman said. “I can let a jury decide that.”

The plaintiffs also argued that the mechanisms by which Google places advertisements, tracks hits and organizes their search engines are obscure, giving advertisers little insight into what they are paying for. 

“Our clients are captive to Google,” said Jordan Elias, attorney for plaintiffs. “They drive up profits without anybody knowing what it looks like.”

Freeman also expressed doubt about Google sharing its proprietary information in a bid to be more transparent to potential advertisers. 

“If Google gives away all that information they put themselves out of business, and that is what I am really struggling with here,” Freeman said. 

The plaintiffs urged Freeman to look at the anticompetitive behavior of Google and how it affects competition, not necessarily competitors. If its conduct makes it harder for advertisers to enter the field of digital advertising, then the tech giant should be held responsible for monopoly conduct, they argue. 

“Its prices are on the rise every day and that ought to tell the tale,” Sharp said.

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Categories / Business, Media, Technology

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