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The US government is taking aim at the engine of Google’s immense wealth – its extremely lucrative ad tech business.<\/p>\n
A trial beginning on Monday will hear the Department of Justice’s case that the search engine’s parent company Alphabet illegally operates a monopoly in the market.<\/p>\n
The company earned more than $200 billion<\/a> (\u00a3152bn) last year through the placing and selling of ads seen by internet users.<\/p>\n Alphabet has argued its success is due to the “effectiveness” of its services – but prosecutors say it has used its market dominance to stifle rivals.<\/p>\n \u201cIt is a really important industry that grabs billions of consumer dollars every year,\u201d said Laura Phillips-Sawyer, a professor at the University of Georgia School of Law. <\/p>\n \u201cI think all consumers have an interest in this litigation.”<\/p>\n It is the second major antitrust case the tech giant has faced in the US. <\/p>\n In August a judge ruled its dominance of search was illegal<\/a>, with the penalties Google and Alphabet will face as a result of that decision so far unclear.<\/p>\n<\/div>\n According to the lawsuit filed by the Department of Justice (DoJ) and a coalition of states<\/a> in 2023, Google dominates the digital ad marketplace and has leveraged its market power to stifle innovation and competition.<\/p>\n Google meanwhile contends it is just one of several hundred companies that facilitate the placement of digital ads in front of consumers.<\/p>\n It argues that competition in the digital ad space is growing, not contracting – citing increased ad growth and revenues for companies such as Apple, Amazon and TikTok as proof in a blog post responding to the DoJ’s lawsuit<\/a> in 2023.<\/p>\n<\/div>\n Both sides will present their cases to US District Judge Leonie Brinkema, who is expected to deliver a verdict.<\/p>\n The bench trial comes on the heels of a landmark decision last month in a different monopoly case brought by the Justice Department against Google.<\/p>\n Judge Amit Mehta ruled that Google acted illegally to squelch competition in its online search business.<\/p>\n \u201cGoogle is a monopolist, and it has acted as one to maintain its monopoly,\u201d he wrote.<\/p>\n<\/div>\n During last year’s trial, Google said it dominated online search because it had a better product.<\/p>\n And the company is seemingly deploying a similar defence in the ad tech case.<\/p>\n When asked for a statement, it referred the BBC to its 2023 blog post, in which it states that \u201cno-one is forced to use our advertising technologies \u2013 they choose to use them because they\u2019re effective.”<\/p>\n Judge Mehta held a status conference on Friday as he begins the process of deciding on remedies for Google\u2019s conduct.<\/p>\n \u201cThe DoJ clearly had a big win, and they\u2019re going to ride that momentum,\u201d Dan Ives, managing director at Wedbush Securities, told the BBC.<\/p>\n He said he expects those remedies to involve “business model tweaks, not a breakup” of the company.<\/p>\n Meanwhile, in Justice Brinkema\u2019s courtroom, the arcane process that governs advertising technology could make the DoJ’s attempts to prove its case an uphill climb.<\/p>\n \u201cWe all use search. We all intuitively understand that product,\u201d said Rebecca Haw Allensworth, an antitrust professor at Vanderbilt University Law School. <\/p>\n By comparison, advertising technology is \u201cso complex that I think that\u2019s going to be a real challenge for the government to make a clear, simple monopolisation argument here.\u201d<\/p>\n The US is not the only country where regulators are unhappy with Google’s ad tech business.<\/p>\n On Friday, the UK Competition and Markets Authority said it believed Google was abusing its dominance in the ad tech industry, according to the findings of its initial investigation<\/a>.<\/p>\n It said it found that Google used anti-competitive practices to dominate the market for online advertising technology – and the potentially unlawful behaviour could be harming thousands of UK publishers and advertisers.<\/p>\n A Google representative said the decision was based on a “flawed” understanding of the ad tech sector.<\/p>\n<\/div>\n