One of the fastest monopoly trials on record wound down Monday, as US District Court Judge Leonie Brinkema heard closing arguments on Google’s alleged monopoly in a case over the company’s ad tech.
Department of Justice lawyer Aaron Teitelbaum kicked things off by telling Brinkema that Google “rigged” ad auctions, allegedly controlling “multiple parts” of services used to place ads all over the Internet, unfairly advantaging itself in three markets, The New York Times reported.
“Google is once, twice, three times a monopolist,” Teitelbaum said, while reinforcing that “these are the markets that make the free and open Internet possible.”
Teitelbaum likened Google to a “predator,” preying on publishers that allegedly had no viable other options for ad revenue but to stick with Google’s products. An executive for News Corp. testified that the news organization felt it was being held “hostage” because it risked losing $9 million in 2017 if it walked away from Google’s advertising platform.
Brinkema, who wasted no time and frequently urged lawyers to avoid repeating themselves or dragging out litigation with unnecessary testimony throughout the trial, reportedly pushed back.
In one instance she asked, “What would happen if a company had produced the best product,” but Teitelbaum rejected the idea that Google’s ad tech platform had competed on the merits.
“The problem is Google hasn’t done that,” Teitelbaum said, alleging that instead better emerging products “died out,” unable to compete on the merits.
According to Vidushi Dyall, the director of legal analysis for the Chamber of Progress (a trade group representing Google), this lack of advertiser testimony or evidence of better products could be key flaws in the DOJ’s argument. When Brinkema asked what better products Google had stamped out, the DOJ came up blank, Dyall posted in a thread on X (formerly Twitter).
Further, Dyall wrote, Brinkema “noted that the DOJ’s case was notably absent of direct testimony from advertisers.” The judge apparently criticized the DOJ for focusing too much on how publishers were harmed while providing “no direct evidence about advertisers and how satisfied/dissatisfied they are with the system,” Dyall wrote.
Google wound down its defense in the US Department of Justice’s ad tech monopoly trial this week, following a week of testimony from witnesses that experts said seemed to lack credibility.
The tech giant started its defense by showing a widely mocked chart that Google executive Scott Sheffer called a “spaghetti football,” supposedly showing a fluid industry thriving thanks to Google’s ad tech platform but mostly just “confusing” everyone and possibly even helping to debunk its case, Open Markets Institute policy analyst Karina Montoya reported.
“The effect of this image might have backfired as it also made it evident that Google is ubiquitous in digital advertising,” Montoya reported. “During DOJ’s cross-examination, the spaghetti football was untangled to show only the ad tech products used specifically by publishers and advertisers on the open web.”
One witness, Marco Hardie, Google’s current head of industry, was even removed from the stand, his testimony deemed irrelevant by US District Judge Leonie Brinkema, Big Tech On Trial reported. Another, Google executive Scott Sheffer, gave testimony Brinkema considered “tainted,” Montoya reported. But perhaps the most heated exchange about a witness’ credibility came during the DOJ’s cross-examination of Mark Israel, the key expert that Google is relying on to challenge the DOJ’s market definition.
Google’s case depends largely on Brinkema agreeing that the DOJ’s market definition is too narrow, with an allegedly outdated focus on display ads on the open web, as opposed to a broader market including display ads appearing in apps or on social media. But experts monitoring the trial suggested that Brinkema may end up questioning Israel’s credibility after DOJ lawyer Aaron Teitelbaum’s aggressive cross-examination.
According to Big Tech on Trial, which posted the exchange on X (formerly Twitter), Teitelbaum’s line of questioning came across as a “striking and effective impeachment of Mark Israel’s credibility as a witness.”
During his testimony, Israel told Brinkema that Google’s share of the US display ads market is only 25 percent, minimizing Google’s alleged dominance while emphasizing that Google faced “intense competition” from other Big Tech companies like Amazon, Meta, and TikTok in this broader market, Open Markets Institute policy analyst Karina Montoya reported.
On cross-examination, Teitelbaum called Israel out as a “serial ‘expert’ for companies facing antitrust challenges” who “always finds that the companies ‘explained away’ market definition,” Big Tech on Trial posted on X. Teitelbaum even read out quotes from past cases “in which judges described” Israel’s “expert testimony as ‘not credible’ and having ‘misunderstood antitrust law.'”
Israel was also accused by past judges of rendering his opinions “based on false assumptions,” according to USvGoogleAds, a site run by the digital advertising watchdog Check My Ads with ad industry partners. And specifically for the Google ad tech case, Teitelbaum noted that Israel omitted ad spend data to seemingly manipulate one of his charts.
“Not a good look,” the watchdog’s site opined.
Perhaps most damaging, Teitelbaum asked Israel to confirm that “80 percent of his income comes from doing this sort of expert testimony,” suggesting that Israel seemingly depended on being paid by companies like Jet Blue and Kroger-Albertsons—and even previously by Google during the search monopoly trial—to muddy the waters on market definition. Lee Hepner, an antitrust lawyer with the American Economic Liberties Project, posted on X that the DOJ’s antitrust chief, Jonathan Kanter, has grown wary of serial experts supposedly sowing distrust in the court system.
“Let me say this clearly—this will not end well,” Kanter said during a speech at a competition law conference this month. “Already we see a seeping distrust of expertise by the courts and by law enforcers.”
“Best witnesses money can buy”
In addition to experts and Google staffers backing up Google’s proposed findings of fact and conclusions of law, Google brought in Courtney Caldwell—the CEO of a small business that once received a grant from Google and appears in Google’s marketing materials—to back up claims that a DOJ win could harm small businesses, Big Tech on Trial reported.
Google’s direct examination of Caldwell was “basically just a Google ad,” Big Tech on Trial said, while Check My Ads’ site suggested that Google mostly just called upon “the best witnesses their money can buy, and it still did not get them very far.”
According to Big Tech on Trial, Google is using a “light touch” in its defense, refusing to go “pound for pound” to refute the DOJ’s case. Using this approach, Google can seemingly ignore any argument the DOJ raises that doesn’t fit into the picture Google wants Brinkema to accept of Google’s ad empire growing organically, rather than anti-competitively constructed with the intent to shut out rivals through mergers and acquisitions.
Where the DOJ wants the judge to see “a Google-only pipeline through the heart of the ad tech stack, denying non-Google rivals the same access,” Google argues that it has only “designed a set of products that work efficiently with each other and attract a valuable customer base.”
Evidence that Brinkeman might find hard to ignore include a 2008 statement from Google’s former president of display advertising, David Rosenblatt, confirming that it would “take an act of god” to get people to switch ad platforms because of extremely high switching costs. Rosenblatt also suggested in a 2009 presentation that Google acquiring DoubleClick for Publishers would make Google’s ad tech like the New York Stock Exchange, putting Google in a position to monitor every ad sale and doing for display ads “what Google did to search.” There’s also a 2010 email where now-YouTube CEO Neal Mohan recommended getting Google ahead in the display ad market by “parking” a rival with “the most traction.”
On Friday, testimony concluded abruptly after the DOJ only called one rebuttal witness, Big Tech on Trial posted on X. Brinkema is expected to hear closing arguments on November 25, Big Tech on Trial reported, and rule in December, Montoya reported.
As the US Department of Justice aims to break up Google’s alleged ad tech monopoly, experts say that remedies sought in the antitrust trial could potentially benefit not just advertisers and publishers but also everyone targeted by ads online.
So far, the DOJ has argued that through acquisitions, Google allegedly monopolizes the ad server market, taking a substantial cut of every online ad sale by tying together products on the buyer and seller sides. Locking publishers into using its seller-side platform to access its large advertiser demand, Google also allegedly shut out rivals by pushing advertisers into a corner, then making it hard for publishers to switch platforms.
This scheme also allegedly set Google up to charge higher “monopoly” fees, the DOJ argued, allegedly putting some publishers out of business and raising costs for advertisers.
But while the harms to publishers and advertisers have been outlined at length, there’s been less talk about the seemingly major consequences for consumers perhaps harmed by the alleged monopoly. Those harms include higher costs of goods, less privacy, and increasingly lower-quality ads that frequently bombard their screens with products nobody wants.
By overcharging by as much as 5 or 10 percent for online ads, Google allegedly placed a “Google tax” on the price of “everyday goods we buy,” Tech Oversight’s Sacha Haworth explained during a press briefing Thursday, where experts closely monitoring the trial shared insights.
“When it comes to lowering costs on families,” Haworth said, “Google has overcharged advertisers and publishers by nearly $2 billion. That’s just over the last four years. That has inflated the price of ads, it’s increased the cost of doing business, and, of course, these costs get passed down to us when we buy things online.”
But while it’s unclear if destroying Google’s alleged monopoly would pass on any savings to consumers, Elise Phillips, policy counsel focused on competition and privacy for Public Knowledge, outlined other benefits in the event of a DOJ win.
She suggested that Google’s conduct has diminished innovation, which has “negatively” affected “the quality diversity and even relevancy of the advertisements that consumers tend to see.”
Were Google’s ad tech to be broken up and behavioral remedies sought, more competition might mean that consumers have more control over how their personal data is used in targeted advertising, Phillips suggested, and ultimately, lead to a future where everyone gets fed higher-quality ads.
That could happen if, instead of Google’s ad model dominating the Internet, less invasive ad targeting models could become more widely adopted, experts suggested. That could enhance privacy and make online ads less terrible after The New York Times declared a “junk ad epidemic” last year.
The thinking goes that if small businesses and publishers benefited from potentially reduced costs, increased revenues, and more options, consumers might start seeing a wider, higher-quality range of ads online, experts suggested.
Better ad models “are already out there,” Open Markets Institute policy analyst Karina Montoya said, such as “conceptual advertising” that uses signals that, unlike Google’s targeting, don’t rely on “gigantic, massive data sets that collect every single thing that we do in all of our devices and that don’t ask for our consent.”
But any emerging ad models are seemingly “crushed and flattened by this current dominant business model that’s really arising” from Google’s tight grip on the ad tech markets that the DOJ is targeting, Montoya said. Those include markets “for publisher ad servers, advertiser ad networks, and the ad exchanges that connect the two,” Reuters reported.
At the furthest extreme, loosening Google’s grip on the online ad industry could even “revolutionize the Internet,” Haworth suggested.
One theory posits that if publishers’ revenues increased, consumers would also benefit from more information potentially becoming available on the open web—as less content potentially gets stuck behind paywalls as desperate publishers seek ways to make up for lost ad revenue.
Montoya—who also is a reporter for the Center for Journalism & Liberty, which monitors how media outlets can thrive in today’s digital economy—noted that publishers depending on reader funding through subscriptions or donations is not sustainable if society wants to “have an open in free market where everybody can access information that they deserve and have a right to access.” By reducing Google’s control, the DOJ argues that publishers would be more financially stable, and Montoya hopes the public is starting to understand how that could benefit the open web.
“The trial is really allowing the public to see a full display of Google’s pattern of retaliatory behavior, really just to protect its monopoly power,” Montoya sad. “This idea that innovation and ways to monetize journalistic content has to come only from Google is wrong and this is really their defense.”
Enlarge/ A staffer with the Paul, Weiss legal firm wheels boxes of legal documents into the Albert V. Bryan US Courthouse at the start of a Department of Justice antitrust trial against Google over its advertiing business in Alexandria, Virginia, on September 9, 2024. Google faces its second major antitrust trial in less than a year, with the US government accusing the tech giant of dominating online advertising and stifling competition.
Just a couple of days into the Google ad tech antitrust trial, it seems clear that the heart of the US Department of Justice’s case is proving that Google Ad Manager is the key to the tech giant’s alleged monopoly.
Google Ad Manager is the buy-and-sell side ad tech platform launched following Google’s acquisition of DoubleClick and AdX in 2008 for $3 billion. It is currently used to connect Google’s publisher ad servers with its ad exchanges, tying the two together in a way that allegedly locks the majority of publishers into paying higher fees on the publisher side because they can’t afford to drop Google’s ad exchange.
The DOJ has argued that Google Ad Manager “serves 90 percent of publishers that use the ad tech tools to sell their online ad inventory,” AdAge reported, and through it, Google clearly wields monopoly powers.
In her opening statement, DOJ attorney Julia Tarver Wood argued that acquisitions helped Google manipulate the rules of ad auctions to maximize profits while making it harder for rivals to enter and compete in the markets Google allegedly monopolized. The DOJ has argued those alleged monopolies are in markets “for publisher ad servers, advertiser ad networks, and the ad exchanges that connect the two,” Reuters reported.
Google has denied this characterization of its ad tech dominance, calling the DOJ’s market definitions too narrow. The tech company also pointed out that the Federal Trade Commission (FTC) investigated and unconditionally approved the DoubleClick merger in 2007, amidst what the FTC described as urgent “high profile public discussions of the competitive merits of the transaction, in which numerous (sometimes conflicting) theories of competitive harm were proposed.” At that time, the FTC concluded that the acquisition “was unlikely to reduce competition in any relevant antitrust market.”
But in its complaint, the DOJ argued that the DoubleClick “acquisition vaulted Google into a commanding position over the tools publishers use to sell advertising opportunities, complementing Google’s existing tool for advertisers, Google Ads, and set the stage for Google’s later exclusionary conduct across the ad tech industry.”
To set things right, at the very least, the DOJ has asked the court to order Google to spin off Google Ad Manager, which may or may not include valuable products like Google’s Display and Video 360 (DV360) platform. There is also the possibility that the US district judge, Leonie Brinkema, could order Google to sell off its ad tech business entirely.
One problem with those proposed remedies, analysts told AdAge, is that no one knows how big Google’s ad tech business really is or the actual value of Google Ad Manager.
Google Ad Manager could be worth less if Google’s DV360 platform isn’t included in the sale or if selling either the publisher or advertiser side cuts out data allowing Google to set the prices that it wants. The CEO of an ad platform called Permutive, Joe Root, told AdAge that “it is hard to say how much of the value of Google’s ads business is because it has this advertiser product and DV360, versus how much of its value comes from Google Ad Manager alone.”
Root doubts that Google Ad Manager is “on its own that valuable.” However, based on “newly released documents for the trial,” some analysts predict that “any new entity spun out of Google” would be “almost too big for any buyer,” AdAge reported.
One estimate from an ad tech consultant who helms a strategic advisory firm called Luma Partners, Terence Kawaja, suggested that Google’s ad tech business as a standalone company “could be worth up to $95 billion” today, AdAge reported.
“You can’t divest $100 billion,” Kawaja said. “There is no buyer for it. [Google] would have to spin it off to shareholders, that’s how any forced remedy would manifest.”
