Fresh on the heels of a U.S. District Judge finding Google guilty of violating antitrust laws to preserve its search monopoly dominance, the tech giant is back in court facing another antitrust lawsuit for running an ad tech monopoly that might break up the company.
Google accused of running an ad tech monopoly
The US Department of Justice is accusing Google of purposely running a vast ad tech monopoly to reduce its rivals and drive up the costs for publishers and advertisers, thereby maximizing profits.
The antitrust trial against Google began on Monday, September 9, when the US Justice Department, a coalition of U.S. states, and Google made their opening statements in an Alexandria courthouse in Virginia.
The judge’s job is determining whether Google created and holds a monopoly over online advertising technology, and his decision could break up the company.
A trifecta of monopolies
Federal regulators accuse Google of creating and operating a monopoly over online advertising technology, which matches publishers with advertisers by controlling the ad exchange market.
The regulators contend that by controlling both sides of the buy and sell transactions between publishers and advertisers, Google dominates the software technology, enabling it to profit by a massive 36 cents on the dollar.
DOJ lawyer Julia Tarver Wood said to the court:
- “One monopoly is bad enough. But a trifecta of monopolies is what we have here.”
No one wins — except Google
The new lawsuit comes just one month after U.S. District Judge Amit Mehta found Google guilty of creating and maintaining an illegal monopoly in online search, where he said:
- “Google is a monopolist, and it has acted as one to maintain its monopoly.”
The district judge will decide on Google’s faith later this year.
In the meantime, DOJ lawyer Tarver Wood is echoing Judge Amit Mehta’s ruling by saying:
- “No one wins — except Google.”
Google says the government’s case is like a time capsule
Google’s lawyer, Karen Dunn, came out fighting by saying the federal government’s case is built upon the internet of yesteryear when users typed exact www search addresses into the URL using desktop computers.
Dunn protested that online advertisers now mostly promote their products and services on social media platforms and streaming services.
During Dunn`s opening statement, she said the government’s case was like a time capsule:
- “The case was like a time capsule with a Blackberry, an iPod, and a Blockbuster video card.”
She alsosaid,
- “Supreme Court precedents warn judges about the serious risk of error or unintended consequences when dealing with rapidly emerging technology and considering whether antitrust law requires intervention.”
Dunn also informed the court that any action against Google wouldn’t benefit small independent businesses because it would only allow their rivals, like Microsoft, TikTok, and Amazon, to fill the void.
Divestiture is a definite possibility
Google now faces two lawsuits that could cause a breakup in its business.
Babson College management practice professor Peter Cohan said the latest case could damage Google more than the first antitrust lawsuit because the most apparent ruling would be to instruct Google to sell percentages of its billion-dollar ad tech business.
Cohan said:
- “Divestitures are definitely a possible remedy for this second case.”
- “It could be potentially more significant than initially meets the eye.”
U.S. District Judge Leonie Brinkema, who is renowned for his global-profile terrorism trials (including that of 9/11 defendant Zacarias Moussaoui), will preside over the trial.
When he is not writing content, Terry can be found on his boat in Italy or chilling in his villa in Spain.
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