DOJ claims Google has “trifecta of monopolies” on Day 1 of ad tech trial

On Monday, the U.S. Department of Justice’s next monopoly trial against Google began in Virginia, this time challenging the tech giant’s dominance in advertising technology.

The lawsuit comes after Google lost two major cases that proved it had a monopoly over both general search and the Android app store. During her opening statement, DOJ attorney Julia Tarver Wood told U.S. District Judge Leonie Brinkema, who will rule in the case after Google wrote a check to avoid a jury trial, that “it’s worth saying the quiet part out loud,” AP News reported.

“One monopoly is bad enough,” Wood said. “But a trifecta of monopolies is what we have here.”

In the complaint, the Justice Department alleged that Google harmed competition in the ad tech industry “by waging a systematic campaign to gain control of the broad array of high-tech tools used by publishers, advertisers, and brokers to facilitate digital advertising.”

The result of this “treacherous” and allegedly anti-competitive behavior is that Google now takes at least 30 cents “of every advertising dollar that flows from advertisers to website publishers through Google’s ad technology tools … and sometimes much more,” according to the Justice Department.

Meanwhile, Google is profiting from both advertisers and publishers, causing “website creators to earn less and advertisers to pay more” than “they would in a market where unfettered competitive pressures could regulate prices and lead to more innovative advertising technologies,” the Justice Department said.

On Monday, Wood told Brinkema that Google deliberately put itself in this position to “manipulate the rules of ad auctions to its own advantage,” The Washington Post reported.

“Publishers were understandably furious,” Wood said. “The evidence will show there was nothing they could do.”

Wood confirmed that the DOJ planned to call multiple publishers as witnesses in the coming weeks to explain the damage caused. “Executives from companies including USA Today, (Wall Street) Journal parent News Corp., and the Daily Mail” are expected to take the stand, the Post reported.

According to experts, the ad tech lawsuit, which is expected to last four to six weeks, is likely the most far-reaching of all the monopoly lawsuits Google has faced in recent times.

That’s because during the DOJ’s trial proving Google’s search monopoly, it remained unclear what remedies the DOJ was seeking. Some of the ways to destroy Google’s search monopoly would be “unlikely to create meaningful competition” or hurt Google’s profits, experts told Ars, but a more drastic order to scrap the Chrome browser or Android operating system could have a real impact on Google’s revenue. The DOJ won’t release even a rough outline of proposed remedies in that case until December, Reuters reported, and the judge isn’t expected to rule until August of next year.

But the Justice Department has been very clear about the actions needed in the ad tech case, “asking Brinkema to order a divestment of Google’s Ad Manager suite of services, which is responsible for many of the rectangular ads that fill the tops and sides of web pages across the Internet,” the Post reported.

Because the most “obvious” remedy would be to force Google to sell off parts of its advertising business, experts told AP News that the ad tech lawsuit “could potentially be more damaging to Google” than the search lawsuit. Perhaps most extreme, antitrust expert Shubha Ghosh told Ars that “if this case against Google plays out like the last one, it could pave the way for a split into separate search and advertising businesses.”

In the Justice Department’s complaint, the plaintiffs argued that it is “critical to restore competition in these markets by ending Google’s anticompetitive practices, annulling Google’s anticompetitive acquisitions, and imposing an injunction sufficient to deprive Google of the benefits of its illegal conduct and to prevent further harm to competition in the future.”

Ghosh said that Google’s unwinding of the acquisitions could result in Google no longer representing the interests of both advertisers and sellers in each ad auction. Instead, Google would have to pick a side or possibly hire a broker.

While the Post reported that Google has argued that “customers prefer the convenience of a one-stop shop,” the Justice Department hopes to prove that Google’s alleged monopoly has closed down newspapers in the U.S. and threatens to cause further harm if left unchecked.