The second antitrust trial against Google could influence the future of online advertising.

• A second antitrust trial against Google by the DOJ commences on Monday in a Virginia court.
• Google's use of its ad tools has been accused by the agency of creating a monopoly.
• Despite U.S. officials' efforts to target Big Tech companies, only Google has faced legal action.

A month after losing a landmark antitrust case brought by the Department of Justice, is facing off against federal prosecutors for a second time.

In August, a judge declared that Google has been monopolizing internet search, marking the largest antitrust ruling in the tech industry since the case against Microsoft 20 years ago. Currently, Google is defending itself against accusations that its advertising business has created a monopoly that has resulted in higher ad prices for customers.

The tech antitrust trial in Alexandria, Virginia, starting on Monday and lasting for several weeks, is the first from a case brought by the Biden administration. The earlier lawsuit was filed in October 2020 by the Trump administration.

Only Google has been sued by U.S. officials in federal court among Big Tech companies, with the DOJ accusing Apple of having a monopoly in its iPhone ecosystem that harmed consumers, developers, and rival phone makers.

In 2023, the Federal Trade Commission and 17 states filed an antitrust lawsuit against Facebook (now Meta), alleging that the company had abused its monopoly power to inflate prices, degrade quality for shoppers, and unlawfully exclude rivals, thereby undermining competition.

Google's digital ad business, worth $200 billion, is centered on its ad tools.

The government alleges that Google has violated Sections 1 and 2 of the Sherman Act by engaging in anticompetitive behavior. The DOJ will contend that Google monopolized the market by locking in publishers and advertisers to its products, forcing websites to develop workarounds. A group of states, including California, Colorado, Connecticut, New Jersey, New York, Rhode Island, and Tennessee, have joined the case.

Google's ad business has been criticized for years due to its unique insights and potential leverage resulting from its operations on multiple sides of the market, including buying, selling, and an ad exchange. In its initial lawsuit, the DOJ cited internal communication from a Google ad executive, who stated that owning multiple sides of the ad-selling process is similar to Goldman or Citibank owning the NYSE.

The DOJ aims to limit Google's control over its ad products by potentially divesting from the Google Ad Manager suite (GAM), a platform that enables brands to manage ad campaigns and track ad performance while allowing publishers to sell ad inventory.

Unlike Google Ads, which is primarily for businesses advertising their products or services across various platforms, Google's flagship platform is not focused on advertising.

In the most recent quarter, Alphabet, Google's parent company, reported $64.6 billion in ad revenue, which accounts for more than three-quarters of their total sales. Of that amount, $48.5 billion came from search and other businesses such as Gmail and Maps, while $8.7 billion came from YouTube.

Google Network's second-quarter revenue was $7.4 billion, or about 11% of total ad sales, and includes the GAM suite.

Google may face a flood of litigation from advertisers seeking monetary rewards if the DOJ is successful, with Bernstein analysts estimating that the company could face up to $100 billion in such lawsuits.

In the first antitrust case, the court ruled that Google violated Section 2 of the Sherman Act, which prohibits monopolies. Judge Amit Mehta of the U.S. District Court for the District of Columbia concurred with the DOJ, which contended that Google maintained its market share through the creation of formidable barriers to entry and a self-reinforcing feedback loop that sustained its dominance.

Mehta wrote that Google behaves like a monopolist to preserve its dominant position.

Google is awaiting its punishment for the case, with the DOJ requesting an extended time frame until February to present remedies, followed by a hearing in April. However, Google believes the DOJ should have completed its research and be prepared to present its proposal in October.

What each side will argue

The DOJ intends to demonstrate that Google has amassed unprecedented influence through its acquisition of companies such as DoubleClick in 2008 and the development of services that enable advertisers to target users across the internet.

The Justice Department alleges that the company's M&A strategy "paved the way for Google's later anticompetitive behavior in the ad tech industry," specifically in the ad server market, where Google holds a dominant 91% market share. The agency claims that Google abuses its power by charging unfairly high ad prices to publishers.

The DOJ intends to summon YouTube CEO Neal Mohan for live testimony. Prior to his current position, Mohan served as vice president at DoubleClick, which was later acquired by Google. Following the acquisition, DoubleClick's technology enabled Google to mandate that publishers use all of its tools in order to access any of them, preventing them from utilizing rival services during the online ad-buying process, the agency claims.

The DOJ states that website creators earn less and advertisers pay more than they would in a competitive market with disciplined prices, resulting in innovative ad tech tools and ultimately lower cost transactions for market participants.

The government states that some publishers have been compelled to adopt subscription-based models to sustain their operations, while others have gone bankrupt.

Google has consistently refuted accusations of dominating online advertising, emphasizing the presence of competitors such as Meta. The company will contend that consumers and advertisers have a wide range of options, with the online ad market having undergone significant changes.

The DOJ's antitrust lawsuit against Google will argue that the company's actions would hinder innovation, increase advertising costs, and make it more difficult for small businesses and publishers to thrive.

The company claims that its ad tools are capable of adapting to the billions of ad auctions occurring daily on the internet, and that the DOJ lacks an accurate understanding of the ad space. Additionally, Google will assert in court that it has consistently provided competitive rates to customers, who frequently combine advertising platforms.

Google will argue that DoubleClick and AdMeld weren't successful acquisitions at the time and that regulators approved them.

The DOJ has the potential to call on Jerry Dischler, the former vice president of Google's ad platform and current head of cloud applications, as well as several Google product managers in order to prove its case.

The DOJ's list includes Google AI executive Sissie Hsiao, who was previously a director of global display, video and mobile app advertising, and Scott Sheffer, who is listed as vice president of Google partnerships. The government plans to present evidence from internal Google communications, testimony from publishers, advertisers and companies that tried to compete with Google, as well as experts and professors from Stanford and Harvard, according to filings.

The DOJ requested testimony from executives at Meta and BuzzFeed, and suggested depositions from executives at The New York Times. However, it's unclear if the individuals named on the list of potential witnesses will actually be called.

Google declined to comment for this article.

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