This article was compiled with the help of generative AI based on data and analysis that is original to EMARKETER.
Google faces its second antitrust trial, with the US Department of Justice (DOJ) alleging the tech giant has illegally monopolized the ad tech space. The case, which began September 9th, centers around Google's dominance in online advertising technology.
The DOJ is seeking to prove that Google has monopolies in the publisher ad server, ad network, and ad exchange markets. On the “Behind the Numbers” podcast our analysts Jeremy Goldman and Evelyn Mitchell-Wolf debate the case.
The DOJ’s arguments:
1. Tying practices. Prosecutors allege Google engages in anti-competitive tying, making access to its ad exchange conditional on using its ad server. “The DOJ contends that all of those relationships between Google's ad products are textbook anticompetitive tying, where a seller makes the sale of one product conditional upon the purchase of another,” said Mitchell-Wolf.
2. Acquisition strategy. The DOJ accuses Google of acquiring its way to dominance, particularly through its 2008 purchase of DoubleClick.
3. Conflict of interest. Mitchell-Wolf noted that DOJ witnesses have been quoted as saying they feel like they have no recourse to some of Google’s changes. “They [say they] cannot advocate for themselves effectively to Google to make sure that their issues are being heard, especially because Google serves both sides of the market. So there's a conflict of interest there.”
Google's defense strategy:
1. Competitive landscape. Google argues it operates in a highly competitive ad tech market with players like Meta, Amazon, and TikTok. "Display advertising encompasses many channels beyond just Google's offerings like social media, retail media, mobile and app ads," said Goldman.
2. Innovation benefits. The company claims its investments in technologies like real-time bidding (RTB) and dynamic allocation have benefited the entire ad ecosystem, he said.
3. Market definition. The lack of a clear market definition in the case is something Google feels should be considered. “I think it fails to account for the broader ad ecosystem that we’re all living in these days,” said Goldman.
If the DOJ wins, possible consequences and worst-case scenarios for Google include forced divestiture of parts of Google's ad tech stack, increased regulatory oversight, and lawsuits from advertisers.
As the trial continues, its implications extend beyond the US. Both the UK and EU have launched similar investigations into Google's ad tech practices, signaling potential global ramifications for the company's business model.
This was originally featured in the EMARKETER Daily newsletter. For more marketing insights, statistics, and trends, subscribe here.