Google Faces New Antitrust Trial Over Search Engine Monopoly Ruling

ALEXANDRIA, Va. — Following a significant ruling that deemed Google’s search engine an illegal monopoly, the tech giant is now faced with another antitrust lawsuit that could dismantle aspects of its advertising technology.

The lawsuit, led by the Justice Department in collaboration with several states, claims that Google has established and continues to uphold a monopoly over the technology that connects online publishers with advertisers. As described in court filings, this dominance on both the buying and selling sides of the advertising process allows Google to retain as much as 36 cents for every dollar when facilitating transactions between publishers and advertisers.

Google counters that the lawsuit is grounded in an outdated view of the internet—one where desktop computers were dominant, and users meticulously typed web addresses. According to Google, advertisers are increasingly turning to social media platforms like TikTok and streaming services such as Peacock to engage their target audiences.

Despite the government’s claims, recent figures indicate a decline in revenue for Google Networks— the division encompassing services like AdSense and Google Ad Manager, pivotal to the case. Revenue fell from $31.7 billion in 2021 to $31.3 billion in 2023, based on the company’s annual reports.

The trial regarding the alleged monopoly in advertising technology starts on Monday in Alexandria. Initially set as a jury trial, Google successfully pushed for a bench trial by paying the federal government more than $2 million to remove the jury requirement associated with one of the government’s charges.

The case will be overseen by U.S. District Judge Leonie Brinkema, who was appointed by former President Bill Clinton. She has considerable experience with high-profile terrorism trials, including cases linked to the events of September 11. However, she also handles civil trials that involve complex technical issues, notably patent infringement cases.

This trial follows a significant judicial setback for Google regarding its search engine, which is a substantial revenue driver for the company, generating around $307 billion annually. A District of Columbia judge classified the search engine as a monopoly, partially due to the tens of billions of dollars Google pays companies like Apple to secure its status as the default search engine on devices such as iPhones.

No remedies have been imposed in that case as of now, and the government has not publicly shared its proposed actions, though there may be intense scrutiny on whether Google should be allowed to continue exclusivity agreements that solidify its search engine’s default position among consumers.

Experts like Peter Cohan, a management practice professor at Babson College, suggest that the Virginia lawsuit could carry more severe consequences for Google. They believe that appropriate remedies could involve requiring the company to divest parts of its lucrative ad technology business.

Cohan emphasizes, “Divestitures are definitely a possible remedy for this second case. It could be potentially more significant than initially meets the eye.”

Throughout the Virginia trial, the government’s witnesses are expected to include executives from prominent newspapers like The New York Times and Gannett, as well as online news platforms that the government claims have suffered from Google’s practices.

According to government lawyers, “Google extracted extraordinary fees at the expense of the website publishers who make the open internet vibrant and valuable. As publishers generate less money from selling their advertising inventory, they are pushed to place more ads on their websites, put more content behind expensive paywalls, or cease operations entirely.”

In response, Google argues that its fees are not excessively high compared to competitors. They assert that the integration of its technology on both the buy and sell sides improves ad loading speeds and enhances security, also claiming that clients have alternative options to utilize external ad exchanges.

Google contends that the government’s lawsuit is mistakenly centered on display and banner ads that populate desktop browsers, overlooking significant shifts in consumer behavior towards mobile applications and the rise of advertisement placements on social media platforms in the past 15 years.

The government’s position, according to Google’s lawyers, “focuses on a limited type of advertising viewed on a narrow subset of websites when user attention migrated elsewhere years ago. The last year users spent more time accessing websites on the ‘open web,’ rather than on social media, videos, or apps, was 2012.”

The trial is slated to run for several weeks in a courthouse that favors traditional proceedings, which includes restrictions on courtroom technology. This will limit the audience and lawyers, with phones prohibited from the premises, contrasting with the more technologically progressive atmosphere seen in the District of Columbia trial.

During a pretrial session, Google’s legal team requested an increase in the allowed number of computers for use in the courtroom but was turned down by Judge Brinkema, who described the setting as “an old-fashioned courtroom.”