USA v Google: Justice Department takes tech giant to task in trial over ad practices

ALEXANDRIA, Va. (CN) — Along the road from upstart search engine to industry behemoth, executives for Google made a series of purchases and investments in innovative advertising technology. But those moves, the rocket fuel behind Google’s$300 billion in revenue, would become the focus of a federal antitrust trial that began Monday in Alexandria, Virginia.

In a 2023 complaint, the Justice Department charged that Google “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.”

As the trial before U.S. District Judge Leonie Brinkema launched, Julia Tarver Wood, senior litigation counsel with the U.S. Department of Justice’s antitrust division, described Google’s hold on the ad market as “a trifecta of monopolies.”

Control is the operative word in defining monopolies. Google, a brand name so ubiquitous that it is “not just a noun but a verb,” she added, maneuvered to take control over the ad market.

The result: “No one wins except the monopoly,” she said.

The U.S. government, joined by 17 states, contends that Google’s ad products put it in the driver’s seat, controlling buying and selling online.

Google’s 2007 purchase of DoubleClick, a onetime competitor, is one example. Executives “feared that if a rival acquired DoubleClick, Google would not control all the tools that link Google’s advertisers with publisher inventory,” the government contends. “Setting the stage for what was to come, the DoubleClick acquisition provided Google the unilateral power to implement a series of anticompetitive restraints, using its dominance on both the publisher and advertiser sides of the market to inhibit competition across the entire ad tech stack.”

For their part, Google lawyers argue that the market needs no government interference. Google is not out to do something nefarious, asserted Google attorney Karen Dunn, partner at Paul Weiss.

“We’re a big company among others competing for (ad) impressions,” she said.

The government uses gerrymandered market definitions to wrongfully show an increase in Google’s purported market shares, Dunn argued, adding that the government’s case is “not commercial reality.” She compared it to a time capsule stocked with a Blackberry, an iPod and a Blockbuster video card.

Google’s technology is not the only way publishers and advertisers transact.

“Large portions of advertising dollars spent on ads shown through internet-connected devices, apps, and websites do not pass through Google’s tools. They instead flow through direct sales between publishers and advertisers or through walled gardens, social networks and more. The ad tech sector is thriving with new entrants appearing and growing,” the company says in court filings.

The case could take weeks. The government wants an order finding Google acted unlawfully to monopolize the advertiser market in violation of the Sherman Act, a law prohibiting anticompetitive behavior.

The U.S. is also asking the court to force Google to divest its Google Ad Manager suite, which includes its publisher ad server and ad exchange, “along with any additional structural relief as needed to cure any anticompetitive harm.”

Trial over Google’s ad technology follows a legal defeat for the tech giant last month when a federal judge in Washington ruled that Google illegally held a monopoly on search and text advertising. A second trial will determine remedies in that case.

Separately, the media firm Gannett, whose senior vice president Tim Wolfe took the stand Monday to describe working with Google’s ad system, filed a Southern District of New York lawsuit against Google in 2023. “The lawsuit seeks to restore competition in the digital advertising marketplace and end Google’s monopoly, which will encourage investment in newsrooms and news content throughout the country,” Gannett said in a statement.