Google is on the backfoot as it was being forced to justify its stand in court that it doesn’t operate its adtech business as an illegal monopoly and that it has competition within the space.
In a federal antitrust trial brought by the US Department of Justice, they allege that Google has monopolised the technology used to buy and sell website ads, harming publishers and advertisers in the process.
Google’s technologies offer advertisers and publishers a safe ecosystem of tools to transact amid the intensely competitive world of online advertising, the company argued in federal court last week to counter the Justice Department’s allegations that it was an illegal monopoly.
In a federal antitrust trial, enforcers allege that Google has monopolised the technology used to buy and sell website ads, harming publishers and advertisers in the process.
The trial wrapped up on Friday. Judge Leonie Brinkema has scheduled closing arguments for November 25 and aims to issue a ruling before the end of the year.
“Google is never going to tell this court that it is not a big company and that these investments and innovations have not been in its financial interest. They have been,” Karen Dunn, Google’s lead lawyer, said in opening statements. “We are one big company among many others intensely competing on a millisecond-by-millisecond basis for every single ad impression.”
The court has heard damaging testimony that could swing the case in favour of the US government. For example, a top Google executive told colleagues back in 2009 that the goal for the company’s then-nascent online advertising business was to “crush” rival advertising networks. “We’ll be able to crush the other networks and that’s our goal,” said David Rosenblatt, Google’s former president of display advertising. Rosenblatt arrived at Google in 2008 when it acquired his former ad tech company, DoubleClick, and left the following year. The notes of his talk showed him discussing the advantages of owning technology on both sides and the middle of the market. “We’re both Goldman and NYSE,” he said, he said. “Google has created what’s comparable to the NYSE or London Stock Exchange; in other words, we’ll do to display what Google did to search,” Rosenblatt said.
Google’s defence that it had credible competition was also smashed when Meta Platforms, formerly known as Facebook, entered into a deal with Google in 2018 after it conceded internally that it didn’t stand a fighting chance against Google’s monopoly over the technology behind its online display advertising. Brian Boland, who headed Facebook’s advertising technology between 2009 and 2019, told the court that the social network initially aimed to directly challenge Google in the market for display ads sold on websites, according to Bloomberg.
The Facebook Audience Network sought to allow marketers to run ads on the company’s social networks, Facebook and Instagram, as well as buy them on websites and in apps.
However, by 2017, Facebook had concluded that it would face an uphill battle to effectively compete against Alphabet’s Google because of its “monopoly” and the advantages the search giant gives itself within its advertising tools.
Under questioning by the Justice Department, Google’s vice president for global partnerships Scott Sheffer acknowledged that AdSense or AdX Direct platforms don’t give the same access as if the publisher used Google’s ad server since it is the only one that gets real-time price information.
Google’s lawyers said that the company had a legitimate business reason for tightly integrating products across its ad empire: it made it easier for its engineers to reduce ad spam and fraud, benefiting the entire advertising ecosystem.
Opening up its tools to third-party rivals too quickly could make it easier for some to game the system and profit from advertising scams, the company argued.
Google also argued that US law protects the company’s right to choose whether to make its ad tech products work with others. Forcing Google to provide technology and resources to make its ad tech work seamlessly with rival tools would stifle innovation, the company’s lawyer said.
The government is seeking to force Google to share its customers with competitors, said Dunn, Google’s lead lawyer. When the government says “that rival exchanges need to have comparable access to Google Ads demand,” she said, “that’s our customer base.”
Mark Israel, Google’s main economic expert, contended that making Google provide rivals with the same access to its tools would harm competition and amount to “forced interoperability.”
“I think DOJ has the edge and a finding of liability is more likely than not,” said Justin Teresi, an analyst for Bloomberg Intelligence who attended the trial.
