Court is back in session and Google is back on the defense. A month after a federal judge ruled Google is a monopoly because of its search engine, the Big Tech firm is defending its advertising practices. The cases could multiply calls to break up Google.
In a new antitrust trial starting Monday, Sept. 9, the Department of Justice will argue that “Google has used anticompetitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies.”
Essentially, the government is arguing Google has an unlawful monopoly as the leading buyer and seller of digital ads.
The case centers around Google Ad Manager, which websites use to sell advertising space on their sites. The tech comes from Google’s $3.1 billion acquisition of DoubleClick in 2008.
To give you a sense of Google Ad Manager’s influence, read this paragraph below from an article from The New York Times when Google made the offer in 2007.
“DoubleClick, which was founded in 1996, provides display ads on Web sites like MySpace, The Wall Street Journal and America Online as well as software to help those sites maximize ad revenue.”
While MySpace and AOL are irrelevant today, the DoubleClick acquisition helped make Google a display ad powerhouse in a space that was just getting started. Back then, the Federal Trade Commission approved the DoubleClick acquisition, saying it was unlikely to substantially lessen competition. The European Commission also approved the deal.
Today, the government is trying to walk back that approval. Google is now more than 10 times the size it was when it bought DoubleClick. Additionally, ad business generated more than $30 billion in revenue in 2021, according to the government.
“In court, we will show that ad buyers and sellers have many options, and when they choose Google they do so because our ad tech is simple, affordable, and effective,” Google’s vice president of Regulatory Affairs wrote in a blog post Sunday, Sept. 8. “In short – it works.”
It is similar to the argument Google made defending its search engine practice; that its product is just better than the competition. And while Google lost that case, it’s appealing it.
When the search ruling came down, Straight Arrow News asked antitrust expert and former FTC Chair Bill Kovacic about the merits of Google’s argument.
“In making that argument, they are appealing directly to a policy position that has appeared in a number of earlier decisions; that you can’t take a successful enterprise and punish it for offering a better product,” Kovacic said. “So through the trial and certainly through the appeals, they will say, we may not be the perfect company, but there’s no way to explain our position except for our ability to provide our users a better and better experience, and certainly superior to anyone else’s.”
“That’s a very important argument,” Kovacic continued. “But there are still limits on the steps they can take to reinforce the preeminence. But their overriding theme is going to be, ‘We are successful because we have a good product, and not because we use improper business tactics, the very proper tactic we use is offering users a better experience.’”
The advertising trial will not be as financially consequential as the search case: search is more than half of Google’s annual revenue. On Friday, Sept. 6, federal judge Amit Mehta, who ruled Google is a search monopoly, said he’d decide on a remedy by next August.
