Google’s second antitrust trial in the U.S. got underway last week and is expected to last several weeks.
Last month, a U.S. federal judge found that Google illegally maintained a monopoly over online search. This current ad tech antitrust trial is a separate issue, with the case launched by the U.S. DOJ and involving 17 state attorney generals alleging that, through acquisitions and anticompetitive ad auction tactics, Google has created a monopoly of the digital ad market. The lawsuit accuses the tech giant of engaging in “anticompetitive and exclusionary conduct” to cement its dominance over adtech tools that advertisers and publishers use to buy and sell online media.
Earlier this year, the DOJ filed a similar suit against Apple for illegally maintaining a monopoly over the smartphone market.
The government argument is that Google has used its market power to monopolize the online search market, having made deals with companies like Apple and other phone manufacturers to make Google the default search engine on browsers and phones. In addition, DOJ says Google has worked to suppress competition in the digital ad space by controlling the tools used to buy and sell ads, as well as the platform where ads are placed. It alleges that Google controls up to 91% of the ad server market, limiting competition and inflating prices.
Google’s response to allegations of its market domination is that people choose to use its search engine because, the company says, it’s a superior product. The tech giant claims its deals with Apple and other phone companies are legal, and calls the DOJ’s view of the adtech market narrow and outdated, asserting that it has a wide range of competition in the adtech space, including from Amazon, Comcast, Disney, Meta, Microsoft, Target and Walmart.
A major focus of the first week of the trial was Google’s access to and control of massive amounts of data gathered through its platforms and the competitive edge it provides. However, during testimony, publishers, including a former NewsCorp. exec, disclosed the revenue risk if they were to lose access to Google Ads demand side platform, since 40% to 60% of a publisher’s revenue comes through the Google Ads platform. Others criticized Google’s pricing strategies and lack of transparency, saying that controlling both the buy and sell sides of the ad market is a serious conflict of interest.
Robin LeGassicke, managing director digital at Cairns Oneil, says that by connecting its search, programmatic, YouTube, and ad exchange directly with Google Analytics 4, the company has created a closed loop advertising echo system.
“This is what makes it easy as all of these systems speak to each other and can track attribution and ROAS,” says LeGassicke. “The question lies, though, in what truly delivers the best business result? The Google echo system is going to be biased towards itself and it takes a lot of extra work to connect additional channels and see a full suite of metrics across a campaign.”
In addition, LeGassicke says Google has one of the most widely used ad exchanges and DSPs. “So, from a sell side, if you want to be able to scale and sell your available inventory you have no choice but to have your inventory connected into Google’s Ad Manager and play by their rules and pricing models,” she says. “Google’s scale and reach across the various platforms means that it is next to impossible to have a digital plan with scale that doesn’t leverage at least one of their ad platforms. Even if you remove search, one way or another, either through the SSP or DSP, Google is part of the equation.”
Nikki Stone, chief commerce officer for GroupM Canada, says easier may be appealing, but is it the best thing to do.
“I believe that we as an industry need to ensure that we are not allowing any one organization to have a monopoly over any form of advertising. The government of Ontario has recently implemented a 25% minimum for local media support, which is a significant step forward to help ensure that alternative options remain available. Many of us as an industry are committed to that, as well with the CDMC Media Manifesto.”
This week, DOJ is expected to continue to argue that the tech giant unfairly dominates the digital advertising ecosystem by controlling both the buy and sell sides of online ads. Testimony from major news publishers is also expected while Google continues to defend of its practices.