Antitrust: US attacks Google's advertising empire

Google faces its second major U.S. lawsuit in less than a year on Monday, with the U.S. government accusing the tech giant of dominating online advertising and stifling competition.

The Virginia trial follows a landmark search trial last month that found Google has an illegal monopoly on the industry.

The new battle, also brought by the U.S. Justice Department, focuses on ad technology, the complex computer system that determines which ads are seen by which users and how much they cost brands.

The U.S. government accuses Google of controlling the market for displaying banner ads on websites, including those of many media outlets.

“Google has used illegal anticompetitive means to eliminate or substantially reduce any threat to its dominance in digital advertising technologies,” the complaint says.

Government lawyers say Google has used its financial muscle to acquire potential rivals and corner the market, leaving advertisers and publishers with no choice but to use its technology.

They are seeking to get Google to divest parts of its ad tech business.

– “Not much sympathy” –

Google rejects the “fundamentally flawed” allegations and says they run counter to “antitrust principles that help drive economic growth and innovation.”

“The case is also factually flawed, which Google is eager to demonstrate,” the California-based company said in a court filing.

200% Deposit Bonus up to €3,000 180% First Deposit Bonus up to $20,000

The company says the case is based on an outdated version of the internet, ignoring today's context, where ads are also placed in search results, mobile apps and social media.

But even though the market at issue in this trial is small compared to the broader advertising ecosystem, it is “essential to the survival of a large number of important sources of information for the public,” says Evelyn Mitchell-Wolf, an analyst at Emarketer.

“I'm not sure I have a lot of sympathy” for the argument that publishers should settle for fewer options to generate revenue, she added.

The trial is expected to last at least six weeks and involve dozens of witnesses, before Judge Leonie Brinkema. Her decision on whether Google violated antitrust laws will be made several months after the trial.

If convicted, a separate trial will decide what the consequences might be for the world's largest online advertising company.

Analysts at Wedbush Securities say the economic impact of the trial will be limited for Google, regardless of the outcome. Because the business that the government could demand be sold represented less than 1% of the firm's operating income this year, according to them.

The Emarketer firm estimates Google's global market share in digital advertising at nearly 28% in 2024, ahead of its neighbor Meta (Facebook, Instagram) and its 23%, Amazon (9%) and ByteDance's TikTok platform (Douyin in China) (7%).

Similar investigations into Google's dominant position in advertising technology are underway in the European Union and the United Kingdom.

As for the case on the search engine monopoly, it has entered the appeals phase. The US government is expected to propose an overhaul of Google's business in the coming weeks.

All reproduction and representation rights reserved. © (2024) Agence France-Presse