Google’s Ad Empire under Fire with the U.S. Antitrust Trial Set to Begin Today
Alphabet Inc.’s Google heads back to court Monday to face US Justice Department allegations that it manipulates the $677 billion display advertising market in violation of antitrust laws, just one month after losing a landmark ruling that it illegally dominates online search.
The DOJ and a coalition of eight states are accusing Google of acquiring over years the tools used to buy, sell and serve ads across the internet, locking up the technology behind website ads and harming publishers and advertisers.
The trial, which will take place in Alexandria, Virginia, marks the first case brought by the Biden administration against Big Tech to have its day in court. The Justice Department’s earlier lawsuit accusing Google of illegally monopolizing internet search is the biggest antitrust case in tech since a ruling against Microsoft Corp. more than two decades ago. It was filed in October 2020 under former President Donald Trump.
Google has denied the Justice Department’s claims, asserting that its tools work seamlessly with products made by competitors, and that the government’s case is based on an outdated understanding of digital ad markets.
Google holds the top spot in the global digital ad market, which has grown to $676.9 billion, according to 2024 projections by research firm EMarketer. Of Alphabet’s nearly $260 billion in revenue in 2023, about $31.3 billion came from the display advertising at issue in the case, according to the company’s most recent annual earnings report.
Justice Department antitrust lawyers say that Google, using its position as a middleman that controls the market from end to end, drives up the price of ads while paying less to the websites that show them. Because of its dominance across the technology, Google has the ability to force publishers and advertisers to use its suite of products, generating monopoly profits: Google keeps about $36 out of every $100 in advertising spent through its tools, according to the DOJ lawsuit, which was filed last year.
“Website creators earn less, and advertisers pay more, than they would in a market where unfettered competitive pressure could discipline prices and lead to more innovative ad tech tools that would ultimately result in higher quality and lower cost transactions for market participants,” the Justice Department said in the lawsuit.
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