Google in Court: What to Know About the DOJ’s Adtech Lawsuit

Only a few weeks after being officially labeled a monopoly by the U.S. government, Google finds themselves in court once again for more antitrust accusations. The Department of Justice and other States are still the plaintiffs, but instead of focusing on the “search” aspect of Google’s business, they’re now targeting Google’s hold on advertising technology. Let’s break down each side of the case and what advertisers stand to gain (or lose) from the outcome.

NOTE: At time of writing, the DOJ has recently released a 32-page proposed list of remedies against Google; this proposal is related to a different lawsuit regarding Google’s monopoly of search-related services and NOT the adtech case discussed in this article.

The Case of the DOJ

Google faces allegations of maintaining not one, but three monopolies in the adtech space. The crux of the DOJ’s case is that Google now controls both sides of the programmatic market and has taken steps to make sure they remain in power. The plaintiff suggests that:

• Google controls around 87% of the servers that provide programmatic inventory.
• Google commands somewhere between 40% to 80% of the ad-buying networks.
• Finally, Google controls about 50% of the ad exchanges, the marketplace that connects publishers with advertisers.

The DOJ alleges that Google has maintained dominance in these markets primarily through systematic acquisition of its major competitors. DoubleClick, DeepMind, YouTube, and many others competed against Google in the video, AI, and digital advertising space before eventually being bought out.

Additionally, the DOJ pointed out that Google ties the use of its various digital advertising platforms together; if you want to publish ad space through Google’s ad exchange, then you MUST do so through Google’s ad server. Other ad exchanges have very limited access to Google’s ad servers and networks, making it harder and more expensive to find inventory and place ads well.

To summarize the case of the DOJ. Associate Attorney General Vanita Guptia said: ““We allege that Google has captured publishers’ revenue for its own profits and punished publishers who sought out alternatives.”

What Google Says in its Defense

First, Google argues that the DOJ is redefining what the ad market actually is to make Google look like the bad guy. They argue that the advertising industry is much more complicated than the three steps they apparently monopolize, and that the DOJ’s description of “open-web display ads” is truncated and over-simplified.

Next, Google suggests that it has a lot of competition, listing other media giants such as Meta, Amazon, TikTok, Microsoft, and others. Google points out that they have no “duty to deal” with competitors in a way that is more beneficial to the competitors. Should such a duty be imposed, it could be argued that the government is selecting winners and losers within an open competitive market.

Google argues that their services are widely used simply because they are the best around; they assure that advertisers are not forced to use Google’s services due to supracompetitive pricing or other anti competitive practices. Finally, Google points out that individual companies and the ad industry as whole have been steadily growing over the years, which suggests that Google hasn’t been stifling competition.

How Did it Go?

Since the trial began a couple weeks ago, many witnesses from many tech companies – including Google itself – have testified against Google. Here are a few notable highlights:

• Eisar Lipkovitz, former VP of Engineering at Google, said that Google’s ad business routinely omits information when dealing in ads
• Jed Dedrick, CRO of The Trade Desk, testified that Google controls both the buy- and sell-side of digital ads. Dedrick would go on to say he believed the buy- and sell-sides should remain separate
• Rahul Srinivasan, former Product Manager at Google, recalled publishers complaining about Google’s control of publisher pricing at the release of Google’s Unified Pricing Rules. Srinivasan promised that Google would address the feedback, but such follow-up never happened to his knowledge.

Google of course called their own witnesses;

• Neal Mohan, CEO of YouTube, testified that Google has plenty of competition and has not participated in monopolistic behaviors
• Paul Milgram, Professor of Economics at Stanford, suggested that Google’s actions were not anticompetitive
• Judith Chevalier, Professor of Economics at Yale, pointed out that Google’s prices were only slightly above average in the US, and lower than most other places in the world.

Both sides have rested their case and will offer closing arguments on November 25th. The court is presided over by U.S. District Court Judge Leonie Brinkema who will deliver a ruling in the following months.

The general sentiment among industry analysts is that Google’s defense was relatively weak compared to the DOJ’s case. Many of Google’s called witnesses are currently or were recently in the employ of the company, and the DOJ’s cross-examination had several of the witnesses citing numbers that were notably different from submitted materials. To top it all off, Google was shown to delete and destroy potentially incriminating documents, which the judge herself called out as “absolutely inappropriate and improper”.

The DOJ’s previous win in court against Google does set a precedent for anti-competitive suits against Google, which will make it easier for the Judge to reach a similar conclusion in this case. However, Google has cunning lawyers of its own – lawyers that just recently wiggled Google out of a 1.5 billion euro antitrust fee from a previously lost case. The cases may be rested, but this is all far from over.

What Could this Mean for Advertisers in the Long-Term?

If Google wins the case, then things will likely remain largely unchanged. We’ll have a better understanding of how Google runs each of its ad-related businesses, but they will retain their powerful position as a leader in digital ads.

If Google loses, then any number of things could happen as determined appropriate by the court. A company-wide breakup seems unlikely, since this case is focused specifically on the adtech market – even the DOJ didn’t mention a complete breakup in their proposed list of search-related remedies.

As far as this adtech case is concerned, here are some more possible outcomes:

• Removing display advertising from DV360, Google’s DSP
• Separating YouTube from Google’s ad service
• Reduction in Google’s commission prices at each step of the ad-buying process
• Prohibitions on tying ad server and ad exchange services together
• Ongoing government oversight at the company
• Lots of fees

The goal of any government action would be to make Google a little less enticing, allowing alternate ad services to step up. Should Google lose, advertisers and publishers alike should eventually have access to more viable options; that doesn’t necessarily mean it gets cheaper right away.

Depending on what happens, there’s a good chance that advertising prices actually increase for a short time as other services work to catch up and fill the void. In the long term, however, more options in the digital advertising supply chain is better for the industry. Competition encourages better services for lower prices, so while it may take a couple years for the dust to settle, it should settle on a better market overall.

Getting Access to All the Options

Whichever way this case shakes out, the Genius Monkey platform is already here to find you the best bang for your marketing buck. Our Meta-DSP system stacks multiple ad-buying networks, balancing the best placements with the best prices to reach your ideal audience.

Are you ready to increase your brand awareness while decreasing cost-per-conversions? Talk to the Genius Monkeys today to see how your marketing strategy can evolve to the next level!