The US government is taking aim at the engine of Google’s immense wealth its extremely lucrative ad tech business. A trial beginning on Monday will hear the Department of Justice’s case that the search engine’s parent company Alphabet illegally operates a monopoly in the market.
The company earned more than $200 billion last year through the placing and selling of ads seen by internet users.
Alphabet has argued its success is due to the effectiveness of its services – but prosecutors say it has used its market dominance to stifle rivals.
It is a really important industry that grabs billions of consumer dollars every year, said Laura Phillips-Sawyer, a professor at the University of Georgia School of Law.
I think all consumers have an interest in this litigation. It is the second major antitrust case the tech giant has faced in the US.
In August a judge ruled its dominance of search was illegal, with the penalties Google and Alphabet will face as a result of that decision so far unclear.
According to the lawsuit filed by the Department of Justice (DoJ) and a coalition of states in 2023, Google dominates the digital ad marketplace and has leveraged its market power to stifle innovation and competition. Google meanwhile contends it is just one of several hundred companies that facilitate the placement of digital ads in front of consumers.
It argues that competition in the digital ad space is growing, not contracting citing increased ad growth and revenues for companies such as Apple, Amazon and TikTok as proof in a blog post responding to the DoJ’s lawsuit in 2023.
