NAIROBI, Kenya- The U.S. government is setting its sights on the core of Google’s massive wealth—its ad tech business.
With a new antitrust trial kicking off, the Department of Justice (DoJ) is taking on Google’s parent company, Alphabet, over allegations of monopolistic behavior in the lucrative digital ad space.
With over $200 billion in ad revenue last year, Google dominates the market by placing and selling ads across the internet.
While Alphabet defends its success as a result of having better technology, federal prosecutors argue the company has unfairly stifled competition and innovation in the digital advertising world.
On Monday, the DoJ’s antitrust case against Alphabet began, focusing on whether Google has illegally maintained a monopoly in the ad tech space.
Alphabet, unsurprisingly, is pushing back, stating that the digital ad marketplace is fiercely competitive and pointing to companies like Amazon, Apple, and TikTok as growing players in the field.
“Nobody is forced to use our advertising technologies,” Google claims, emphasizing in a 2023 blog post that its tools are chosen because they’re effective.
However, the DoJ and several states argue that Google has leveraged its market dominance to limit innovation, keeping rivals at bay.
This case follows a significant ruling just last month, where Judge Amit Mehta found Google guilty of monopolistic behavior in its search business.
“Google is a monopolist, and it has acted as one to maintain its monopoly,” Mehta wrote. The ad tech trial now rests in the hands of U.S. District Judge Leonie Brinkema.
“Advertising technology is so complex that I think that’s going to be a real challenge for the government to make a clear, simple monopolization argument here,” said Vanderbilt University antitrust professor Rebecca Haw Allensworth.
At the heart of the DoJ’s case is whether Google’s dominance is genuinely harmful to competition or if it’s simply the result of a superior product.
Google argues it is part of a competitive market, but the DoJ contends that the company’s control over both the buying and selling of ads has allowed it to control vast amounts of revenue while squeezing out rivals.
If the government can clearly demonstrate how this control harms both consumers and businesses, the verdict could shake up the ad tech industry.
This isn’t just a U.S. issue. The UK’s Competition and Markets Authority also has its sights set on Google, accusing the company of using anti-competitive practices in the ad tech space, potentially harming thousands of UK businesses.
Google, however, dismissed the UK investigation, calling it based on a “flawed” understanding of the industry.
