Alphabet’s Google (GOOGL) is back in the spotlight as it faces yet another antitrust showdown. The trial, which began in Alexandria, Virginia, on Monday, has brought the tech giant under scrutiny for allegedly dominating the online advertising market. Prosecutors from the U.S. Department of Justice argue that Google has used its size and resources to stifle competition and maintain control over the ad tech ecosystem.
The Monopoly Accusations
The core of the Justice Department’s case claims that Google built a near-monopoly through classic tactics: acquiring competitors, locking in customers, and controlling how online ad transactions are handled. “Google is not here because they are big, they are here because they used that size to crush competition,” said Julia Tarver Wood, a Justice Department attorney, in her opening statement.
With a system that handles over 150,000 ad sales every second, Google is accused of using its dominant position to limit competition in the digital ad market. Prosecutors aim to prove that Google’s ad tech tools restrict publishers and advertisers from using competing services.
Google’s Defense
On the other side, Google’s lead attorney, Karen Dunn, dismissed the accusations, likening the case to an outdated snapshot of the tech world. “This case is like a time capsule that if you broke it open, you would find a BlackBerry, an iPod, and a Blockbuster Video card,” Dunn said, arguing that Google now faces stiff competition from the likes of Amazon (AMZN) and Comcast (CMCSA) in a rapidly evolving digital landscape.
Dunn pointed out that Google’s tools have become interoperable with its rivals, and noted that the Justice Department’s claims resemble those in a recently defeated search monopoly case.
What’s at Stake?
If Google is found guilty of breaking antitrust laws, the Justice Department has requested that Google sell its Ad Manager platform, which includes its publisher ad server and ad exchange. Google’s ad tech products generated $20 billion in revenue in 2020, accounting for 11% of the company’s gross earnings, according to research by Wedbush.
The Broader Picture
This case is one of several targeting Big Tech companies over monopolistic practices. The Justice Department recently won a ruling against Google in a search-related case, and is pursuing a separate lawsuit against Apple (AAPL). Meanwhile, the Federal Trade Commission (FTC) is taking on Meta Platforms (META) and Amazon in similar cases.
As the multi-week trial progresses, all eyes are on U.S. District Judge Leonie Brinkema, who will issue the final ruling in the absence of a jury.