Google is not getting any rest in court. Just a month after a judge ruled that the company has exercised an illegal monopoly in the US search market, the company is back in court on Monday over digital advertising. The company exercises a triple monopoly by controlling supply, demand and the exchange market, according to prosecutors from the Department of Justice, who sued the company along with 17 states. The plaintiffs are asking for the division of Google’s advertising business through divestments to encourage competition. The company denies the accusations and warns that if its model is broken, the result could be lower revenues for publishers and higher prices for advertisers. An 80-year-old judge, Leonie Brinkema, will decide who is right.
The new trial is the latest episode in the Biden administration’s offensive against the monopolistic practices of big business, particularly the tech giants. The main battering rams in this battle have been Lina Khan, head of the Federal Trade Commission (FTC) and, as in this case, the Justice Department team, which reports to Attorney General Merrick Garland.
In the trial that began Monday, the Justice Department argues that Google controls the technology used by nearly all major website publishers to offer advertising space, the main tools used by advertisers to buy that space and the largest ad broker that connects publishers with advertisers. “One monopoly is bad enough. But what we have here is a triple threat of monopolies,” said prosecutor Julia Tarver Wood during her opening statement.
Google’s strategy, it says, has been to neutralize or eliminate actual or potential ad-tech competitors through a series of acquisitions. Prosecutors say that as a result, website creators earn less and advertisers pay more than they should. Google keeps as much as 37 cents of every dollar it brokers, the indictment says. It calls for the sale of the Google Ad Manager suite of applications, including Google’s publisher ad server, DFP (an evolution of DoubleClick, which it bought in 2008 for $3.1 billion), and the brokerage service, AdX.
Lawyer and advisor to Kamala Harris
Google’s attorney in the case, Karen Dunn, 48, has had one of the busiest weeks of her life. On Monday, she was in charge of presenting the defense’s opening statement, but at the same time she is the coordinator of the team that has been preparing the vice president of the United States, Kamala Harris, for the debate she has this Tuesday against Donald Trump in Philadelphia, which could decide the presidential elections on November 5.
In his statement Monday, Dunn compared the lawsuit to a “time capsule with a Blackberry, an iPod and a Blockbuster video card,” the AP reports. Google says the Justice Department’s view is based on outdated assumptions and does not reflect reality. Google sees hundreds of companies actively competing to facilitate online ad placement, from media outlets like Comcast and Disney to retailers like Walmart, Costco and Target to ad technology companies like Criteo, Index Exchange and Trade Desk. It notes that other tech giants like Microsoft, Amazon and Meta also offer vertically integrated solutions.
Dunn has said Supreme Court precedents warn judges of “the grave risk of error or unintended consequences” when dealing with rapidly emerging technology and considering whether antitrust law requires intervention. He has also warned that any action taken against Google will not benefit small businesses but will simply allow other tech giants like Amazon, Microsoft and TikTok to fill the void.
Lee-Anne Mulholland, the company’s vice president of regulatory affairs, I had already anticipated some of the company’s arguments in a post this Sunday. “Ad buyers and sellers have many options, and when they choose Google, they do so because our advertising technology is simple, affordable, and effective. In short, it works,” he says. “By picking winners and losers in a highly competitive industry, the Justice Department risks making it more expensive for small businesses to grow and for websites and apps to be profitable. Let’s not break what works.”
According to Google, its fees for advertising technology are lower than industry averages, which is not a sign of monopoly abuse. “Publishers who sell advertising space keep the most of the revenue.” around 70% of income when you use our products, and in the case of some types of advertising, They are left with even more. Making it harder for businesses to access the integrated products and services they need could increase fees for advertisers and reduce profits for publishers. Nobody wins in this situation,” says Mulholland, who points out that his simple tools are especially popular with small businesses that don’t have the time or resources to hire advertising experts.
The Justice Department filed a small claim for damages on behalf of federal agencies allegedly harmed as advertisers in its lawsuit, seeking to have the suit heard in a jury trial. Google objected, arguing that the case was complex and technical, and paid $2 million in damages to settle that claim (which required a jury) and have the case decided by a judge. The judge in charge is 80-year-old Judge Leonie Brinkema, an appointee of Bill Clinton. Federal judges, including those on the Supreme Court, serve for life in the United States, and there is no mandatory retirement age.
The new trial is not as significant as the previous one, which affected search, the core of Google’s business. In that case, after Judge Amit Mehta ruled that Google exercises an illegal monopoly in search, a new process is now underway to determine what the appropriate remedy is. The judge last week set a timetable with which a decision cannot be expected until August of next year. The possible rulings range from compensation to a possible split of the company, including the probable prohibition of agreements to be the default search engine for browsers such as those on the iPhone, something that could end up harming Apple even more than Google itself.
In the European Union, Google has received the highest fines in history. In 2022, judges upheld a record fine of €4.125 billion for anti-competitive practices in search services. In November 2021, they also upheld another fine of €2.4 billion for favouring its products in searches. In addition, the Commission also imposed another fine of almost €1.5 billion in March 2019 for its abuses in the digital advertising market. More than €8 billion in total.
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