Google's digital ad dominance faces scrutiny in US antitrust trial: Reports

Next week, Alphabet's Google will face a second antitrust trial as the U.S. Department of Justice challenges the company's advertising monetisation system, as per media reports.

This case is part of the Biden administration's broader push to curb big tech through antitrust laws. The upcoming trial in Alexandria, Virginia, will shift focus from Google's widely used search engine to its less visible advertising technology that links website publishers with advertisers. This technology plays a significant role in Google's advertising revenue, which accounted for over 75% of its $307.4 billion income last year.

"Google is far and away the largest seller of advertising on earth. They touch every part of the industry, if not directly, then indirectly. Everyone has an interest in Google one way or another," said Brian Wieser, an advertising consultant and financial analyst.

The Justice Department, along with a coalition of states, will argue that Google violated U.S. antitrust laws in its digital advertising operations. The outcome for these parties could prompt them to ask U.S. District Judge Leonie Brinkema to consider splitting up the company.

The antitrust regulators allege that Google has monopolised the technology used for website ads by integrating its tools for publishers and advertisers, thereby establishing a "privileged position as the middleman."

Google has rejected these allegations, asserting that it is not obligated to share its technological advantages with competitors and that its products are compatible with those of other companies.

The Justice Department contends that Google holds 91% of the market share for ad servers used by publishers to sell ad space, over 85% of the market for ad networks utilised by advertisers, and more than 50% of the market for ad exchanges.

Google argues that its market share is 30% or less when including social media, streaming TV, and apps, claiming the Justice Department's focus on website ads overlooks broader competition. Competitors like Trade Desk and Comcast, as well as PubMatic, may testify. The case will also examine the impact of advertising tech on news organizations, noting significant newspaper closures since 2005.

"Journalism is under threat in large part due to consolidation in the advertising market," Justice Department antitrust chief Jonathan Kanter said at an event held in June by the Open Markets Institute, an anti-monopoly advocacy group.

Current or former executives from News Corp, the Daily Mail, and Gannett may testify against Google. Google argues that a breakup would hinder innovation and increase costs. Testimony from over two dozen current or former employees, including YouTube CEO Neal Mohan, will be key.