Key Google executive takes stand in advertising antitrust trial

ALEXANDRIA, Va. (CN) — An executive who helped carve Google’s path as the dominant player in website advertising took the stand Monday in federal court as the government’s antitrust case against the tech giant entered its second week.

Throughout the first week of trial, prosecutors have claimed that Google monopolized control of web tools that link publishers and advertisers.

On Monday, Neal Mohan, chief executive officer of YouTube, a Google property, defended the moves and acquisitions that have made Google a tech giant. He compared the company’s innovation — juggled while acquiring smaller tech firms and bringing outside technology on board — to “flying a plane while changing the motor.”

But prosecutors for the U.S. Department of Justice charge that Google operates as a monopoly, using an assortment of products on both the buy-and-sell side of advertising in tandem with anti-competitive tactics.

The Justice Department contends in its 2023 lawsuit that Google has used its “dominant position time and again to prevent publishers — its own customers — from efficiently and effectively multi-homing across ad exchanges, and to prevent rival ad tech providers from deploying technology that would have improved the process by which advertisers and publishers find the best advertising matches in real time for each impression.”

Mohan was formerly senior vice president of display and video ads at Google. Before that, he was senior vice president of strategy and product development at DoubleClick — a firm purchased by Google.

Prosecutors asked him about Google’s acquisition of ad firms, such as the 2007-2008 purchase of DoubleClick, which had an ad server that was more advanced than Google’s own.

Google “wanted to make sure that we could adequately innovate,” Mohan said.

Similarly, in 2011, Google acquired AdMeld, a company involved in yield management, the analysis of historical data on pricing, a field Mohan said Google was interested in expanding.

Aaron Teitelbaum, representing the Justice Department, pointed to a memo in which Mohan mentioned “parking” a yield management company.

Teitelbaum asked if he meant to “immobilize one of the yield managers while Google had the chance to catch up.”

Mohan responded that when Google acquires a firm, the company must integrate it into the Google system and said that Google wants to help publishers grow their slice of the pie.

A Google study from 2010 indicated that a tech feature known as dynamic allocation — which allows indirect sales to compete with direct sales — resulted in “an average CPM (cost per mille) lift of 136% compared with fixed, upfront, pre-negotiated sales of non-guaranteed inventory.”

The Justice Department says that dynamic allocation amounts to “a means by which Google manipulated its publisher ad server to give the Google-owned AdX (and only AdX) the opportunity to buy publisher inventory before it was offered to any other ad exchange, and often to do so at artificially low prices.”

If U.S. District Judge Leonie Brinkema finds Google acted unlawfully to monopolize the ad network market in violation of U.S. antitrust laws, she could order Google to divest with some of its advertisement features.

The trial follows a recent legal defeat for the tech giant from 2024 when a judge ruled that Google illegally held a monopoly on search and text advertising.

The case is also set against the backdrop of a downturn in the circulation and financial prospects of U.S. daily newspapers.

In 2022, the estimated total U.S. daily print and digital newspaper circulation was 20.9 million for both weekdays and Sundays, down 8% and 10% respectively from 2021, according to the Pew Research Center. Digital advertising is an important source of revenue; it accounted for 48% of newspaper advertising revenue in 2022, an increase from 17% in 2011.

At the close of his testimony, Mahon was asked to examine a sealed document. Brinkema explained that document acknowledged that Mahon owned significant stock in Google.