By Caden Pearson
A Virginia district court on April 28 rejected Google’s request to dismiss an antitrust lawsuit filed by the Department of Justice (DOJ) about the company’s advertising business.
The lawsuit, filed in the U.S. District Court for the Eastern District of Virginia, accuses Google of monopolizing key digital advertising technologies, known as the “ad tech stack,” in violation of antitrust laws. These technologies are crucial for website publishers to sell ads and for advertisers to reach potential customers.
Eric Mahr, Google’s lawyer, argued that the government’s claim of Google being a monopoly was not justified as the company’s ad business does not meet the 70 percent market share benchmark. He also cited other social media platforms such as Facebook and Tiktok as viable options for advertisers.
In court documents, Google drew a comparison to an unsuccessful antitrust lawsuit against Live Nation, a concert promoter that was accused of holding a monopoly on outdoor amphitheaters. The lawsuit was dismissed because the plaintiffs did not consider alternative options such as indoor concert halls and arenas.
U.S. District Judge Leonie Brinkema highlighted that the key issue in the case will be how to define the market in which Google is accused of having a monopoly. However, she deemed the government’s claims plausible enough to continue with the case, even though the government’s burden of proof will increase during the trial.
Following the hearing, Dan Taylor, Google’s vice president of Global Ads, issued a statement criticizing the lawsuit for overlooking the competitive nature of the digital advertising space, where Google competes with hundreds of companies such as Amazon, Apple, Meta, Microsoft, and TikTok.
Taylor said the lawsuit would impede innovation, increase advertising costs, and pose challenges for small businesses and publishers.
This marks Google’s second loss in the Alexandria federal court. Earlier, Google had tried to consolidate the case with a related lawsuit in New York, which had been ongoing for years. However, Brinkema rejected Google’s request and ordered the case to be heard in the Alexandria courthouse.
Nine states, including Arizona, Illinois, Michigan, Minnesota, Nebraska, New Hampshire, North Carolina, Washington, and West Virginia, joined eight others as plaintiffs in the antitrust lawsuit against Google earlier this month.
According to the lawsuit, Google leveraged its position to force more website publishers to use its tools and solidify its dominance. It is alleged that the company accomplished this through the acquisition of ad tech competitors, compelling more publishers and advertisers to use its products, and impeding the use of rival products.
Google, which has refuted the allegations, maintains that it faces rigorous competition in the digital advertising technology markets and that its services have benefited both consumers and publishers.
The antitrust lawsuit alleges that ad tech tools now have the capability to instantly match publishers with advertisers as soon as an internet user accesses a webpage with ad space for sale. This involves utilizing an automated advertising exchange that conducts a high-speed auction aimed at identifying the most suitable match between a publisher who offers internet ad space and the advertisers who intend to purchase it.
However, the lawsuit contends that Google’s alleged anti-competitive practices have disrupted the ad tech industry.
“One industry behemoth, Google, has corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising,” the lawsuit claims (pdf).
In a court filing, Google argued that the DOJ’s lawsuit failed to consider the competition from other significant players in the online advertising sector and did not satisfy the legal prerequisites to assert that Google has a monopoly.
The company further contended that the DOJ’s case is founded on the presumption that Google’s business decisions in the last 15 years were part of a plan to gain control and eradicate competition without taking into account the diverse competitive pressures and consumer interests that influence the dynamic digital marketplace.
“Success in the digital advertising marketplace depends on placing advertisements on the most relevant publisher webpages or mobile applications in ways that most appeal to viewers. So in developing its ad tech tools, Google considers the interests of advertisers, publishers, and internet users,” the company argued in its motion to dismiss the case (pdf).