Analytics Economy USA World

Google Faces Second Antitrust Trial Over Alleged Ad-Tech Monopoly

Google Faces Second Antitrust Trial Over Alleged Ad-Tech Monopoly
  • PublishedSeptember 9, 2024

Google is facing another antitrust lawsuit, this time from the US Department of Justice (DOJ), over its alleged monopolistic practices in the advertising technology sector.

The trial, set to begin on Monday in Alexandria, Virginia, is the second major antitrust case against the tech giant since September 2023. The DOJ claims that Google’s dominance in the digital advertising market creates an unfair playing field, preventing competitors from thriving and leading to inflated advertising prices for consumers.

Google’s advertising technology business is critical to its financial success. In 2023, the company generated $307 billion in total revenue, with $237 billion—or 77%—coming from its ad-tech services. The DOJ alleges that Google’s control over the buying, selling, and largest ad exchange in the digital advertising space allows it to stifle competition, forcing rivals to abandon the market or operate at a significant disadvantage. This, according to the DOJ, has led to a lack of innovation and higher costs for advertisers.

In court documents, the DOJ cited an internal comparison by a Google advertising executive, likening the company’s control over the ad-tech ecosystem to a scenario where a major financial institution like Goldman Sachs or Citibank would own the New York Stock Exchange, thus consolidating undue power.

Google, however, disputes these claims, arguing that the lawsuit is “backward-looking” and misrepresents the realities of the digital advertising market. In its defense, the company points to growing competition from companies like Apple, Amazon, and TikTok as evidence that the market remains competitive. Google also claims that its success is due to the effectiveness of its services, and it maintains that advertisers choose its platforms voluntarily.

This new trial follows a similar legal battle involving Google’s search engine dominance. In August 2023, a judge ruled that Google had created a monopoly in the search market, using anti-competitive practices against rivals such as DuckDuckGo and Bing. Google’s defense in that case echoed its current argument—that its superior product led to its market dominance, not unfair practices. The ruling in the search engine case is still being evaluated, with remedies expected to be finalized by August 2025.

The outcome of this latest trial could significantly impact Google’s ad-tech business. Experts suggest that while a complete breakup of Google is unlikely, the DOJ may push for major changes to its business model, aiming to level the competitive landscape. As with the search engine trial, the case against Google’s ad-tech practices may be complex, given the intricacies of the digital advertising market, which could pose challenges for the DOJ in proving its monopoly claims.

The US is not alone in scrutinizing Google’s advertising practices. Regulators in the UK are also investigating the company’s ad-tech dominance, with the UK’s Competition and Markets Authority raising concerns about potential anti-competitive behavior that could harm publishers and advertisers.

With input from BBC and FOX Business.