Google’s antitrust trial over online advertising set to begin

By Jody Godoy

(Reuters) – Alphabet (NASDAQ:)’s Google will face U.S. antitrust prosecutors on Monday in Alexandria, Virginia, where the Justice Department will seek to show the company stifled competition in online advertising technology, in the search giant’s second recent showdown with the Justice Department.

Prosecutors say Google has largely dominated the technological infrastructure that funds the flow of news and information on websites through more than 150,000 online ad sales every second. 

The case is an important one for efforts by U.S. antitrust enforcers to challenge alleged Big Tech monopolies, which have spanned the administrations of both Donald Trump and Joe Biden. 

Prosecutors say Google engaged in a complex scheme to dominate website advertising tools, through acquisitions, restrictions on how customers can use its tools and alleged manipulation of ad auctions.

Google denies the allegations, saying they misconstrue lawful efforts to develop its technology and serve its own customers. Prosecutors overlook how the digital advertising market has shifted to apps and connected TV, where Google faces stiff competition, the company has said.

If U.S. District Judge Leonie Brinkema finds that Google broke the law, she would later consider prosecutors’ request to make Google sell off, at minimum, Google Ad Manager, a platform that includes Google’s publisher ad server and its ad exchange.

According to research by stock analyst Wedbush, Google’s ad tech tools accounted for $20 billion, or 11% of the company’s gross revenue in 2020 and around $1 billion, or 2.6%, of operating profit that year.  

Ad Manager represented 4.1% of revenue and 1.5% of operating profit in 2020, according to Wedbush research and analysis of court documents.

More recent figures were redacted from court documents.

Google’s defense team is led by Karen Dunn, a partner at the law firm Paul, Weiss, who has guided debate preparations for several prominent Democrats including Vice President Kamala Harris.

The government’s legal team is headed by Julia Tarver Wood, a veteran trial lawyer who joined the Justice Department last year. She previously worked at Paul, Weiss where she represented companies including insurer American International Group (NYSE:), Mastercard (NYSE:) and Amazon.com (NASDAQ:).

The multiweek trial is expected to feature witnesses from Google and competitors in the digital advertising space such as the Trade Desk (NASDAQ:), and Comcast (NASDAQ:) as well as publishers including News Corp (NASDAQ:) and Gannett, who prosecutors say were harmed through Google’s conduct.

The case is one of several challenging alleged Big Tech monopolies.

The Justice Department won a ruling against Google last month in another case over its dominance in online search, and is separately suing Apple (NASDAQ:). The U.S. Federal Trade Commission is pursuing cases against Facebook parent Meta Platforms (NASDAQ:) and Amazon.