Big tech was already found guilty of monopolizing the search engine market in August
The Federal Court for the Eastern District of Virginia in the United States began on Monday (9.Sep.2024) the judgment which will decide whether Google holds a monopoly over the digital advertising market.
THE big tech and accused (PDF – 3 MB) of antitrust practices – actions to prevent free competition, to abuse their position of control to harm advertisers, websites that sell digital ads and consumers, and to buy competitors to consolidate their power over the market.
The outcome of the trial could significantly change the configuration of the digital advertising market, given that Google controls the main tools for buying, selling and displaying ads on internet pages.
The lawsuit was filed in 2020 by the Department of Justice, which in the U.S. court system acts as the prosecutor’s office, and a bipartisan coalition of 17 states. The trial is expected to last four to six weeks.
Google Ad Manager is currently the main tool for inventory management and ad trading. The platform is used by both advertisers (who buy ads) and publishers and website owners (who sell ads). Even companies that do not sell their ads through the platform often use Ad Manager to manage advertising banners and videos on their websites.
The prosecution argues that this omnipresence of Google in the market makes it difficult for new products and alternatives to establish themselves in the market and makes advertisers and publishers hostages of their platform.
The defense of big tech claims that market dominance was achieved because of the quality of products made possible through a long history of innovation. It also argues that the prosecution is based on an outdated scenario and that, in fact, the digital advertising market is very competitive, with relevant players such as Amazon and Meta.
If Google is found guilty, the company could be forced to change its business practices, pay hefty fines or even be forced to spin off its digital advertising business into other companies.
Any decision in this regard will have a huge impact on the configuration of the digital advertising market, which has been shaped by Google’s tools over the years.
Digital advertising service is the “goose that lays the golden eggs” from Alphabet, holding which includes Google. In 2023, the service accounted for around 75% of the group’s US$307.4 billion in revenue.
OTHER ANTITRUST JUDGMENTS
The case is the second antitrust trial that big tech faces this year. In August, the District Court of Columbia ruled that the company illegally maintains a monopoly with its online search engine. Now, the judge will determine what measures should be implemented to “dissolve” this monopoly and foster free competition.
This is also not the first trial that big tech faces monopolistic practices in the search engine market. In 2019, the European Union fined big tech by 1.43 billion euros for abusing its dominant position in the search market and other markets. The European Commission declared that Google had favored its price comparison and shopping service.
REGULATION OF BIG TECHS
The advancement of networks in people’s daily lives has led several countries to discuss and implement ways to regulate this market.
This year, the European Union sanctioned the Digital Services Act. Based on it, in July, the European Commission defined that the business model of Meta, the company that owns Facebook, Instagram and WhatsApp, which offers subscription plans to users to remove ads, is against the bloc’s legislation. Understand that Mark Zuckerberg’s proposal of “pay or consent” traps consumers in a binary and illegal model.
Meta denied violating the laws and said it would continue dialogue with authorities to reach an agreement before the final opinion on the matter is issued by the European Commission in March 2025.
In the United States, President Joe Biden (Democrat) sanctioned a law in April 2024 that requires ByteDance, a Chinese company, to sell TikTok in the United States by 2025. The measure was approved by the Legislative of the country shortly before.
The imposition was due to growing suspicion among the US population and authorities that China could be using the platform to access data from US citizens and monitor their internet activities.
TikTok CEO Shou Zi Chew then said the move was an attempt to ban the app in the US. He also said the legislation violates the First Amendment of the US Constitution, which guarantees the right to freedom of expression.
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