Google’s antitrust lawsuit over online ads is about to begin
Alphabet’s Google faces U.S. antimonopoly prosecutors in Alexandria, Virginia, on Monday, where the Justice Department will attempt to show that the company stifled competition in online advertising technology. It’s the search giant’s second recent confrontation with the Justice Department.
Prosecutors say Google largely dominates the technological infrastructure that funds the flow of news and information on websites, through more than 150,000 online ad sales every second.
The case is important to U.S. antitrust efforts to crack down on alleged Big Tech monopolies, which have operated under both the Donald Trump and Joe Biden administrations.
Prosecutors allege that Google engaged in an elaborate scheme to gain control of advertising tools on websites through acquisitions, restrictions on how customers could use the tools and alleged manipulation of ad auctions.
Google denies the allegations, saying they misrepresent legitimate efforts to develop its technology and serve its own customers. The plaintiffs ignore how the digital advertising market has shifted to apps and connected TV, where Google faces stiff competition, the company says.
If U.S. District Judge Leonie Brinkema rules that Google violated the law, she will later consider the plaintiffs’ request to force Google to at least sell Google Ad Manager, a platform that includes Google’s ad server and Google’s ad exchange.
According to research by stock analyst Wedbush, Google’s ad technology tools accounted for $20 billion (approximately Rs 1,67,909 crore), or 11 percent, of the company’s gross revenue in 2020 and about $1 billion (approximately Rs 83.95 crore), or 2.6 percent, of its operating profit that year.
According to Wedbush’s research and analysis of court documents, Ad Manager represented 4.1 percent of revenue and 1.5 percent of operating profit in 2020.
More recent figures have been redacted from court documents.
Google’s defense team is led by Karen Dunn, a partner at the Paul Weiss law firm, who has guided debate preparations for several prominent Democrats, including Vice President Kamala Harris.
The government’s legal team is led by Julia Tarver Wood, a veteran trial lawyer who joined the Justice Department last year. She previously worked at Paul, Weiss, where she represented companies including insurer American International Group, Mastercard and Amazon.com.
The trial, which will last several weeks, is expected to include witnesses from Google and competitors in the digital advertising space, such as Trade Desk and Comcast, as well as publishers such as News Corp and Gannett, who prosecutors say have been harmed by Google’s conduct.
The case is one of several challenging alleged Big Tech monopolies.
The Justice Department won a ruling last month against Google in a separate case over its dominance in online search, and is separately suing Apple. The U.S. Federal Trade Commission is pursuing cases against Facebook parent Meta Platforms and Amazon.
© Thomson Reuters 2024
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