The U.S. Department of Justice (DOJ) and a coalition of states have launched a significant antitrust lawsuit against Google, alleging that the tech giant has built and maintained a monopoly over online advertising technology. This legal challenge, which begins trial today in Alexandria, Virginia, threatens to potentially break up the company's ad tech business.
The Government's Case
According to the lawsuit, Google's dominance in both the buy-side and sell-side of online advertising transactions allows it to keep as much as 36 cents on every dollar when brokering ad sales between publishers and advertisers. This level of control, the government argues, has led to excessive fees that harm website publishers and, by extension, the open internet.
Google's Defense
Google contends that the government's case is outdated, focusing on display ads and banner ads typically viewed on desktop computers. The company argues that user attention has shifted significantly to mobile apps and social media platforms in recent years, changing the landscape of online advertising.
Potential Consequences
If the government prevails, the consequences for Google could be severe. Peter Cohan, a professor at Babson College, suggests that forced divestitures of parts of Google's ad tech business are a possible remedy. This could potentially be more impactful than the recent ruling against Google's search engine monopoly.
Broader Implications
This case is part of a larger trend of antitrust actions against big tech companies. Amazon is facing similar scrutiny from the Federal Trade Commission over its dominance in online retail and marketplace services. As these legal battles unfold, they could reshape the landscape of digital advertising and e-commerce in the coming years.
The trial, presided over by U.S. District Judge Leonie Brinkema, is expected to last several weeks and will be closely watched by the tech industry and regulators alike.