Google returns to court to face online advertising monopoly claims

Google returned to the courtroom Monday to face allegations that the search giant unlawfully maintained its dominance in the online advertising market.

The trial comes after a federal judge ruled last month in a separate case that Google has an illegal monopoly on web searches. It focuses on a lawsuit U.S. regulators filed last year that accuses the company of engaging in anticompetitive practices that include purchasing competitors and forcing publishers to use its tools.

The antitrust lawsuits against Google underscore the government’s efforts to rein in Big Tech. News outlets, which have faced mass layoffs and cuts, are struggling to compete against tech companies that collect a vast amount of data on their users to offer targeted advertising.

Google’s parent company, Alphabet, reported more than $200 billion in ad revenue last year, an amount that continues to grow.

The antitrust case sets the stage for a potential breakup of Google’s advertising and search businesses or an unwinding of acquisitions that have been pivotal to the tech giant’s growth, legal experts say. Some of Google’s biggest ad company deals include the purchase of DoubleClick and AdMob, the latter of which allows mobile app developers to sell ads.

Shubha Ghosh, a law professor at Syracuse University, said the intent of antitrust laws is to create more dynamic competition.

“At the same level that people are concerned about big government, there’s a concern about the private sector becoming too big,� he said.

As Google tries to fend off concerns that it wields too much power, it’s also grappling with changes in the way people search, including the rise of chatbots such as OpenAI’s ChatGPT that can quickly summarize information. Worries about where the technology is headed as people become more reliant on these products in their daily lives might be fueling concerns about dominance, Ghosh said.

Filed by the U.S. Department of Justice and a group of states, the lawsuit also alleges the Mountain View, Calif.-based company keeps a tight hold on technology that gives it an illegal level of control over the selling and buying of online advertisements.

Dominance over the software that runs both sides of the transactions enables Google to keep as much as 36 cents on the dollar when it brokers sales between publishers and advertisers, the government contends in court documents.

“It’s worth saying the quiet part out loud,� Justice Department lawyer Julia Tarver Wood said during her opening statement. “One monopoly is bad enough. But a trifecta of monopolies is what we have here.�

Regulators have accused Google of stifling innovation, harming publishers, advertisers and online users. As online publishers attract fewer ad dollars, they have less resources to create content, according to the lawsuit.

Google has denied the claims, saying the case is built on an outdated understanding of how internet advertising works as advertisers have shifted their focus to social media and streaming companies in an effort to reach audiences.

Google lawyer Karen Dunn said in her opening statement that action taken against the tech giant would benefit rivals such as Amazon, Microsoft and TikTok, which also make money from online ads.

In a blog post about the trial, Google said that ad sellers and buyers have options but they choose its ad tools because they’re affordable and effective.

“By picking winners and losers in a highly competitive industry, the DOJ risks making it more expensive for small businesses to grow and for websites and apps to make money,� Lee-Anne Mulholland, Google’s vice president of regulatory affairs, said in the post.

The trial, which will be decided by a judge instead of a jury, comes on the heels of the case over Google’s search engine. In that one, a judge in the District of Columbia found that the company had cornered internet searches in part by making tens of billions of dollars in payments each year to companies such as Apple to lock in Google as the default search engine on iPhones and other devices.

Last week, a group of analysts for Wedbush said the ad tech products that regulators are focusing on in the lawsuit account for a small part of Google’s revenue.

“We believe that if the company were required to divest the Google Ad Manager business, the financial impact to overall operations would be minimal,� the analysts said in the note.

California lawmakers also have been trying to address concerns that Google has too much control over the advertising market. They introduced a bill that would have required Google to pay news outlets for distributing its content but the search giant lobbied aggressively against the idea. In August, lawmakers announced they reached a deal with Google that included a plan to distribute nearly $250 million to news outlets over the next five years.

Google isn’t the only tech firm in the hot seat over antitrust concerns. U.S. regulators also have brought antitrust cases against Facebook’s parent company, Meta, as well as Apple and Amazon.

As the trial continues, the outcome of the case will be closely watched.

“These are going to be the next set of cases in antitrust that are going to get taught and debated,� Ghosh said.

The Associated Press contributed to this report.