Google: What the US has argued in the Google ad tech antitrust trial

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Over the past two weeks, lawyers for the Department of Justice have questioned more than a dozen witnesses as they try to prove that Google has broken antitrust laws, part of a second major federal antitrust trial against the tech giant.

The government on Friday concluded its main arguments in the case — US et al. v. Google — and the internet giant started mounting its defense. The case, filed last year, accuses Google of building a monopoly over the technology that places ads on websites around the internet.

Now, Google will deny the claims. The company argues that the ad tech industry is intensely competitive, and accuses the Justice Department of ignoring rivals like Facebook and Amazon to make its case sound more compelling.

The trial, which is taking place in US District Court for the Eastern District of Virginia, is expected to last about four weeks. After that, Judge Leonie Brinkema could take several months to make a decision. The stakes are high: The government has asked for a breakup of the company, requiring Google to sell off some assets.

Two prime threads have emerged during the trial: what the government says Google has done to illegally build and maintain its monopoly and how those practices have harmed website operators, advertisers and ultimately consumers. Here are the Justice Department’s main arguments.


How Google built a monopoly in ad tech software.

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The Justice Department and a group of states accused the tech company of abusing control of its ad technology and violating antitrust law, in part through its 2008 acquisition of advertising software company DoubleClick. Google has pushed up ad prices and also harmed publishers by taking a big cut of each sale, the government argues. The acquisition of DoubleClick “set the competitive conditions for all the anticompetitive conduct that followed,” Julia Tarver Wood, the government’s lead courtroom lawyer, said in her opening statement. The government has said that Google controls 87% of the market for a crucial technology that publishers use to sell ads.

The DoubleClick acquisition gave Google two linchpins in its ad tech operation, the government says. The first is a system that people who run websites use to offer ad space, like the rectangle at the top of the homepage on a news site. The second is a so-called exchange — software that conducts real-time auctions between publishers and advertisers to sell ads as users load a webpage. Google also monopolizes some technology that allows advertisers to buy ad space on different websites, the government said.

That means that Google can be involved in every stage of a deal to sell ad space online. The Justice Department pointed to an email from a former Google employee that compared that arrangement to allowing a bank to own the New York Stock Exchange.

Google’s ad tech business generated $31 billion in revenue last year, or about a tenth of the company’s total revenues.

How Google cemented its power.

As Google built its system of ad technology, it also set the rules to protect its monopoly and benefit itself, the government argued.

Millions of advertisers use Google’s tools to place ads around the web. For years, those tools could place bids only on ad auctions that took place on Google’s system, giving the company a major advantage, the government argued.

“They have been draconian and absolutist,” Jed Dederick, the chief revenue officer of the Trade Desk, which makes rival tools for advertisers, said during his testimony.

The Justice Department said Google had run the same playbook against publishers. It made it harder for publishers to use ad systems that competed with Google’s, and a former ad tech executive testified that he had shut down his company’s competing business as a result.

Google also rigged the rules of the auctions to benefit itself, the government said. That included, at various times, prioritizing itself when publishers compared bids from ad space from different auction systems. The company also said that publishers needed to set the same minimum price for ad space with both Google and its competitors, making it harder for publishers to negotiate with the tech giant.

How Google harmed publishers, advertisers and consumers.

Google charges a 20% fee to publishers who run ad auctions using its system, known as an ad exchange, witnesses testified. But the government said that it had been possible only because of Google’s dominance.

In one 2018 email shown to Brinkema, Chris LaSala, a Google executive who has since left the company, said that the fee had been justified only because publishers had needed access to the enormous demand for ad space provided by the company’s tools.

To accommodate that fee, advertisers paid more than they would have otherwise in a free market, the government said. And publishers made less, with Google skimming the high fee off the top of each transaction.

The government says that means the public has ultimately suffered, as the websites where they get news and information have been bled dry of revenue and higher ad prices made products cost more.

“It is likely that consumers were harmed,” Rosa M. Abrantes-Metz, an expert witness for the government, said during testimony Wednesday.



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