{"id":32050,"date":"2024-09-10T09:01:00","date_gmt":"2024-09-10T14:01:00","guid":{"rendered":"https:\/\/ustower.net\/?p=32050"},"modified":"2024-09-10T19:04:51","modified_gmt":"2024-09-11T00:04:51","slug":"googles-search-business-was-deemed-a-monopoly-now-its-ad-business-is-on-trial","status":"publish","type":"post","link":"https:\/\/ustower.net\/?p=32050","title":{"rendered":"Google\u2019s search business was deemed a monopoly. Now its ad business is on trial"},"content":{"rendered":"\n

Google hasn\u2019t just illegally cornered the market in search<\/u><\/a> \u2014 it\u2019s squeezed online publishers and advertisers with a \u201ctrifecta\u201d of monopolies that have harmed virtually the entire World Wide Web, the US Department of Justice said Monday in a Virginia federal courtroom.<\/p>\n\n\n\n

Kicking off a high-stakes trial that could reshape the basic economics of running a website, DOJ attorneys this week \u2014 along with 17 states \u2014 are trying to convince a federal judge that Google broke US antitrust law with its powerful advertising business.<\/p>\n\n\n\n

The long-awaited Google-DOJ showdown focuses on the $31 billion portion of Google\u2019s ad business that matches website publishers with advertisers. This \u201cstack\u201d of technologies determines what banner ads appear on countless sites across the web.<\/p>\n\n\n\n

The Biden administration\u2019s lawsuit<\/u><\/a>, filed in 2023, claims Google has used anticompetitive mergers, self-dealing and auction manipulation to reduce competition and cement its dominance, resulting in higher prices for publishers and advertisers.<\/p>\n\n\n\n

\u201cGoogle is not here because they\u2019re big,\u201d Julia Tarver Wood, a senior DOJ attorney, told District Judge Leonie Brinkema in the trial\u2019s opening minutes Monday. \u201cThey\u2019re here because they use that size to crush competition.\u201d<\/p>\n\n\n\n

Google has not shied away from the fight. The US government has \u201cgerrymandered\u201d its way to a court case, the company responded on Monday, leading to \u201cabsurd results\u201d that don\u2019t reflect the modern realities of internet advertising.<\/p>\n\n\n\n

The government\u2019s lawsuit \u201cis like a time capsule, where if you break it open there would be a BlackBerry, an iPod and a Blockbuster Video card,\u201d said Karen Dunn, Google\u2019s high-powered outside attorney who delivered the company\u2019s opening statement before racing out to prep Vice President Kamala Harris for her Tuesday debate with former President Donald Trump.<\/p>\n\n\n\n

This month\u2019s closely watched Google ad tech trial comes weeks after another federal court handed Google what may be its biggest court defeat in company history, when a federal judge sided with state and federal officials and ruled its flagship search engine an illegal monopoly<\/u><\/a>.<\/p>\n\n\n\n

Now, the Justice Department is hoping for a twofer.<\/p>\n\n\n\n

Google\u2019s search engine may have been the killer app that made it a daily destination for millions of consumers, but it was the company\u2019s advertising technology that helped Google monetize much of the rest of the web \u2014 and Google took illegal steps to thwart competition in that space, according to the states and DOJ.<\/p>\n\n\n\n

From gobbling up ad-tech rivals through anticompetitive mergers to bullying businesses into using Google\u2019s ad products, to controlling key businesses in each part of the ad-tech stack, the governments say, Google drove up prices for advertisers and choked off revenue for websites.<\/p>\n\n\n\n

Tim Wolfe, a revenue executive at the media company Gannett and DOJ\u2019s first witness, told the court that of the $15 million in fees that the publisher of USA Today pays to ad-tech companies every year, about $10 million, or two-thirds, goes to Google.<\/p>\n\n\n\n

For better or for worse, he said, publishers are dependent on Google\u2019s advertising tools, have no good alternatives to it and that it would be \u201ca heavy lift\u201d to try to switch away.<\/p>\n\n\n\n

The company used acquisitions of companies such as DoubleClick and AdMeld to kill off threats to its advertising business early on, DOJ said Monday, and that Google\u2019s control of multiple technologies in ad-tech stack creates conflicts that encourage Google to self-deal.<\/p>\n\n\n\n

The complaint even names the US Army as one of the advertisers allegedly harmed by Google\u2019s practices. The US government has spent $100 million since 2019 on buying internet ads, according to the lawsuit.<\/p>\n\n\n\n

\u201cOne monopoly is bad enough, but a trifecta of monopolies is what we have here,\u201d said Wood, the DOJ attorney, referring to Google\u2019s publisher ad server business, its advertising exchange AdX, and its advertiser ad network. In each line of business, Wood said, Google has at least half, and by some measures as much as 91%, of the market. \u201cThe rules are set such that all roads lead back to Google,\u201d Wood added.<\/p>\n\n\n\n

Authorities have called for that group of businesses within Google \u2014 which is distinct from Google\u2019s search or search ads business \u2014 to be broken up.<\/p>\n\n\n\n

The ad tech case is the second of two DOJ challenges to Google\u2019s power since the Trump administration, and the latest test of a renewed US commitment to enforcing the nation\u2019s competition laws. But for Google, which has denied monopolizing the ad tech industry, the case is an assault on what it says are essential tools for small businesses and publishers.<\/p>\n\n\n\n

Google has described the online advertising industry as vibrant and competitive, calling the government suit filed last year<\/u><\/a> a misguided attempt to pick winners and losers.<\/p>\n\n\n\n

In its court filings, Google has argued the DOJ suit focuses too narrowly on website advertising. On Monday, Google accused DOJ of overstating the company\u2019s marketshare based on excluding rivals such as Amazon, Meta, Microsoft and TikTok. Advertisers can choose whether to use Google\u2019s tools, or rival tools, or even divert ad spend away from websites and to other formats and platforms that don\u2019t involve Google\u2019s ad tech, such as on Instagram or Netflix, Google has said.<\/p>\n\n\n\n

Factoring in those other sources of competition drops Google\u2019s share of the ad exchange market from 34% to 17%, said Dunn, Google\u2019s attorney. And if Google is broken up, she warned, it will only benefit other Big Tech giants.<\/p>\n\n\n\n

\u201cAs apps become more important to digital content providers,\u201d Google wrote in a pre-trial filing<\/u><\/a>, \u201cthe amount of inventory they sell through apps, and ad tech spending to manage that inventory, increases.\u201d<\/p>\n\n\n\n

Both sides gave opening statements on a clear, sunny day at the US District Court for the Eastern District of Virginia. Sitting on the dais was Brinkema, who listened quietly except to ask a rare follow-up question or to hurry things along. A Clinton appointee, Brinkema is a former Justice Department attorney who, as a judge, has also presided over numerous terrorism- and immigration-related cases.<\/p>\n\n\n\n

During the Google case, Brinkema has made clear her preference for efficiency. When the Justice Department asked for a 10-week trial, she pushed for six. And on Monday, when a Google attorney kept trying to ask the same question of a witness two different ways, she interjected: \u201cI\u2019m going to sustain the objection before I even hear it. Let\u2019s move it along.\u201d<\/p>\n\n\n\n

The multi-week trial could feature witness testimony from high-profile partners of Google as well as its critics. The list of potential witnesses includes current or former executives from Comcast, Disney, The New York Times and Meta, along with some high-ranking Google employees, such as YouTube CEO Neal Mohan.<\/p>\n\n\n\n

That arrangement has harmed publishers and advertisers to the tune of hundreds of millions of dollars in extra fees since 2019, according to estimates in a pre-trial filing by DOJ.<\/p>\n\n\n\n

For its part, Google has argued in its filings that the price of advertising continues to fall industry-wide and that its own market share in the display advertising market has been \u201csteadily declining since 2013.\u201d<\/p>\n\n\n\n

It\u2019s not certain what specific penalties Google could face if Brinkema ultimately agrees with the DOJ. The trial beginning Monday is merely a first step to determine whether Google broke the law. Still, a breakup of Google\u2019s ad tech business could potentially trigger a shakeup of the digital advertising industry and Google\u2019s role within it.<\/p>\n\n\n\n

The US government believes a breakup would create new or different financial incentives for everyone in the market. But Google has argued it might instead harm smaller websites that rely on its tools, or merely serve to benefit other large, established giants in the digital ad industry.<\/p>\n\n\n\n

cnn<\/a><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Google hasn\u2019t just illegally cornered the market in search \u2014 it\u2019s squeezed online publishers and advertisers with a \u201ctrifecta\u201d of monopolies that have harmed virtually the entire World Wide Web, the US Department of Justice said Monday in a Virginia federal courtroom. Kicking off a high-stakes trial that could reshape the basic economics of running a website, DOJ […]<\/p>\n","protected":false},"author":5,"featured_media":32051,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1155],"tags":[8085,3304,2581,26861,2195],"class_list":["post-32050","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-advertising","tag-business","tag-google","tag-monopoly","tag-search"],"_links":{"self":[{"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/posts\/32050","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/ustower.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=32050"}],"version-history":[{"count":1,"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/posts\/32050\/revisions"}],"predecessor-version":[{"id":32052,"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/posts\/32050\/revisions\/32052"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ustower.net\/index.php?rest_route=\/wp\/v2\/media\/32051"}],"wp:attachment":[{"href":"https:\/\/ustower.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=32050"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ustower.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=32050"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ustower.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=32050"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}