The U.S. government is taking aim at the engine of Google’s vast wealth: its extremely profitable ad-tech business.
The Justice Department will begin a trial on Monday in a case alleging that Alphabet, the search engine’s parent company, illegally monopolized the market.
company Revenue exceeds $200 billion By placing and selling ads seen by internet users last year (£152bn).
Alphabet has argued that its success is due to the “effectiveness” of its services, but prosecutors say the company has used its market dominance to suppress rivals.
“This is a very important industry that generates billions of dollars in revenue for consumers every year,” said Laura Phillips-Sawyer, a professor at the University of Georgia School of Law.
“I think all consumers are interested in this lawsuit.”
This is the second major antitrust case the tech giant has faced in the United States.
In August, a judge ruled Leading searches is illegalSo far, the penalties Google and Alphabet will face as a result of the decision are unclear.
according to lawsuit Submitted by the Department of Justice (DoJ) and a coalition of states By 2023, Google will dominate the digital advertising market and use its market power to stifle innovation and competition.
Google, meanwhile, claims it is just one of hundreds of companies facilitating the placement of digital ads in front of consumers.
It believes competition in the digital advertising space is increasing, not shrinking – citing in a blog post the growth of advertising and revenue from companies such as Apple, Amazon and TikTok as evidence Responding to Justice Department lawsuit 2023.
Both sides will present their cases before U.S. District Judge Leonie Brinkema, who is expected to rule.
The bench trial follows a landmark ruling last month in a separate monopoly case brought by the Justice Department against Google.
Judge Amit Mehta ruled that Google was unlawful in suppressing competition in its online search business.
“Google is a monopoly, and it has always defended its monopoly,” he wrote.
During last year’s trial, Google said it dominated online search because it had better products.
The company appears to be taking similar defenses in the ad tech case.
When asked for a statement, it referred the BBC to its 2023 blog post, which stated that “no one is forced to use our ad technologies – they choose to use them because they work.”
Judge Mehta held a status conference on Friday to begin making a decision on remedies for Google’s conduct.
Dan Ives, managing director at Wedbush Securities, told the BBC: “The Department of Justice has clearly had a significant victory and they will ride on it.”
He said he expected the remedies would involve “business model adjustments rather than a spin-off” of the company.
Meanwhile, in Judge Brinkema’s courtroom, the arcane procedures governing ad technology could make it difficult for the Justice Department to prove its case.
“We all use search. We all intuitively understand the product.
Ad tech, by contrast, “is very complex, and I think it’s going to be a real challenge for the government to make a clear, simple monopoly argument here.”
The U.S. isn’t the only country where regulators are unhappy with Google’s ad tech business.
On Friday, the UK Competition and Markets Authority reportedly said it believed Google was abusing its dominant position in the ad tech industry. preliminary findings.
The report said it found that Google had used anti-competitive behavior to dominate the online advertising technology market, a potentially illegal behavior that could harm the interests of thousands of British publishers and advertisers.
A Google representative said the decision was based on a “flawed” understanding of the ad tech industry.
