US takes on Google in blockbuster antitrust trial to determine if tech firm holds unfair monopoly in online advertising

Google is once again facing charges that it has built an illegal monopoly on the lucrative digital advertising market, the second attempt by the U.S. government to break up one of the world’s most profitable companies.

This comes just over a month after US Judge Amrit Mehta ruled in a separate case that Google had indeed used illegal means to maintain its dominant search engine.

The new antitrust lawsuit is being filed in the Eastern District of Virginia by the U.S. Department of Justice and 17 state attorneys general, all of whom allege that Google’s iron grip on the market for ad technology software used to buy and sell online ads is illegal.

U.S. District Judge Leonie Brinkema will hear opening statements Monday in a trial expected to last four weeks. There is no jury, leaving the tech company’s fate in the hands of witnesses and Judge Brinkema.

The trial focuses on the open web display advertising market and the tools behind ad auctions that take place in the milliseconds it takes to load a web page.

Google is a giant in this market and owns a publisher ad server that is used by virtually all online publishers, from news websites to independent bloggers.

This allows them to manage their ads and connect the tools advertisers need to buy ad space.

Importantly, Google also offers the ad exchange that connects publishers and advertisers.

According to the U.S. Department of Justice, this trinity helped the company eliminate competitors in the online advertising industry, while simultaneously increasing advertising costs and reducing revenue for publishers.

The government wants to break up this all-encompassing tool, called Ad Manager, which is a combination of Google’s Publisher Ad Server and Ad Exchange and earned Google an operating profit of $368 million in 2020.

If the judge rules against Google, it could force the company to sell Ad Manager, losing a consistent source of revenue for the company.

If the judge rules against Google, it could force Google to sell Ad Manager, which would deprive the company of a stable source of revenue and expand the reach of the online advertising industry.

The Ministry of Justice is pushing for this decision.

Google has been waging a “campaign to condition, monitor and tax digital advertising transactions” for 15 years, the government’s lawyers said in a recent court filing.

“This campaign was exclusionary, anti-competitive and mutually reinforcing.”

One of the allegations is that Google enticed companies with shady practices and maintained its monopoly position by forcing companies to comply with the rules.

Google disagrees, claiming that its innovations have rewarded it with sky-high profits. According to its lawyers, the DoJ is out of touch with the realities of the private sector.

A ruling against Google could effectively wipe out billions in revenue the company makes each year from its ad tech business. Pictured: The Eastern District of Virginia courthouse where the trial is taking place

“In court, we will show that ad buyers and sellers have many options, and when they choose Google, they do so because our ad technology is simple, affordable, and effective. In short, it works,” Google wrote in a blog post Sunday.

Judge Brinkema criticized Google last month for its previous company policy that allowed for the automatic deletion of employee chat data. According to him, this is ‘not the way a responsible company should operate.’

“A lot of evidence has already been destroyed,” she said.

The Justice Department has asked the judge to rule that the destroyed evidence was unfavorable to Google. The company argues that the government knew about Google’s automatic deletion policy for years before the company began doing so.

The judge decided not to impose a formal penalty on Google for this, but did say that the company would take into account whether witnesses were credible and which were not.