Google faces new antitrust trial after ruling declaring search engine a monopoly

ALEXANDRIA, Va. — A month after a judge declared Google’s search engine an illegal monopoly, the tech giant is facing another anti-monopoly lawsuit that threatens to break up the company, this time over its advertising technology.

The Justice Department and a coalition of states allege that Google has built and maintained a monopoly on the technology that connects online publishers with advertisers. Dominance over the software on both the buy and sell sides of the transaction allows Google to retain up to 36 cents on the dollar when it brokers sales between publishers and advertisers, the government alleges in court documents.

Google says the government’s case is based on an internet of yesteryear, when desktop computers ruled the roost and users carefully typed precise World Wide Web addresses into URL fields. Advertisers are now more likely to turn to social media companies like TikTok or streaming TV services like Peacock to reach audiences.

Google Networks, the division of the Mountain View, California-based tech giant that also includes services such as AdSense and Google Ad Manager at the heart of the case, has actually seen revenue decline in recent years, from $31.7 billion in 2021 to $31.3 billion in 2023, according to the company’s annual reports.

The trial over the alleged ad tech monopoly begins Monday in Alexandria, Virginia. It was initially set to be a jury trial, but Google managed to force a lawsuitwriting a check for more than $2 million to the federal government to substantiate the government’s only claim requiring a jury trial.

The case will now be decided by U.S. District Judge Leonie Brinkema, who was appointed to the bench by former President Bill Clinton and is best known for high-profile terrorism trials, including that of 9/11 suspect Zacarias Moussaoui. But Brinkema also has experience with highly technical civil trials, and works in a courthouse that handles an inordinate number of patent infringement cases.

The Virginia case follows a major defeat for Google over its search engine, which generates the bulk of the company’s $307 billion in annual revenue. A judge in the District of Columbia declared the search engine a monopolypartly sustained by the tens of billions of dollars Google pays each year to companies like Apple to make Google the default search engine for consumers who buy an iPhone or other gadget.

In that case, the court has not yet imposed remedies. The government has not offered the proposed sanctions, although there could be scrutiny over whether Google is allowed to continue to strike exclusivity deals that make its search engine the default option for consumers.

According to Peter Cohan, a professor of management practice at Babson College, the Virginia case could be even more damaging to Google because the obvious solution would be for Google to sell off parts of its ad technology business, which generates billions of dollars in revenue annually.

“Divestment is certainly a potential remedy for this second case,” Cohan said. “It could potentially be much more important than it appears at first glance.”

The government’s witnesses at the Virginia trial are expected to include executives from newspaper publishers including The New York Times Co. and Gannett, and online news sites that the government says have been particularly harmed by Google’s practices.

“Google has charged extraordinary fees at the expense of the website publishers who make the open Internet vibrant and valuable,” government lawyers wrote in court documents. “As publishers earn less money from the sale of their advertising inventory, publishers are forced to place more ads on their websites, put more content behind expensive paywalls, or go out of business altogether.”

Google disputes that it charges excessive fees compared to its competitors. The company also claims that the integration of its technology on the buy side, sell side and in the middle makes ads and web pages load quickly and improves security. And it says customers have options to work with third-party ad exchanges.

Google says the government’s case wrongly focuses on display ads and banner ads that load on web pages visited on desktop computers. Google says the government fails to take into account the shift of consumers to mobile apps and the explosion of advertising on social media sites over the past 15 years.

The government’s case “focuses on a narrow type of advertising that was viewed on a narrow subset of websites as users’ attention migrated elsewhere years ago,” Google’s lawyers wrote in a pretrial document. “The last year that users spent more time visiting websites on the ‘open web,’ rather than social media, video or apps, was 2012.”

The trial, expected to last several weeks, is taking place in a courthouse that is adhering strictly to traditional practices, including an opposition to technology in the courtroom. Cell phones are banned in the courthouse, much to the chagrin of a tech press corps accustomed to tweeting live updates as the District of Columbia trial unfolds.

Even the lawyers, and there are many on both sides, are limited in their technology. During a preliminary hearing Wednesday, Google’s lawyers requested more than the two computers each side is allowed in court during the trial. Brinkema denied the request.

“This is an old-fashioned courtroom,” she said.