Google ‘crushes competition’ in ad market, antitrust trial hears

The US Department of Justice accused Google of stifling competition to dominate the display advertising market and push up prices for publishers and advertisers, on the first day of an antitrust trial.

“Google is not here because they are big, they are here because they used that size to crush competition,” Julia Tarver Wood, an attorney with the justice department’s antitrust division, said in an opening statement at a federal court in Alexandria, Virginia.

The trial comes just weeks after a federal judge ruled in a separate case that Google broke the law with its monopoly over online searches. Alphabet, Google’s parent company, has said it will appeal against the ruling.

Google has been accused of dominating the infrastructure that funds the flow of information on websites through more than 150,000 online ad sales every second.

The tech group used monopoly-building tactics to eliminate competitors through acquisitions, locking customers into using its products, and controlling how transactions occurred in the online ad market, prosecutors claimed on Monday.

Tim Wolfe, an advertising executive at Gannett, testified in court that the company had used Google’s publisher ad server for around 13 years, and said there were no other realistic options.

Defending Google, the company’s lead attorney, Karen Dunn, claimed the justice department was basing its case on “ancient history”. She said that Google now faced competition from technology groups including Amazon and Comcast, as digital ad spending shifts to apps and streaming video.

The case is “like a time capsule that if you broke it open you would find a BlackBerry, an iPod and a Blockbuster Video card”, she said.

US District Judge Leonie Brinkema is hearing the case without a jury. The trial is expected to last for several weeks. If Brinkema finds that Google broke the law, she would later consider prosecutors’ request to make the company sell off Google Ad Manager, a platform that includes Google’s publisher ad server and its ad exchange.

Google’s ad tech tools accounted for $20 billion, or 11 per cent, of the company’s revenue in 2020, and about $1 billion, or 2.6 per cent, of operating profit that year, according to analysis by Wedbush Securities, the brokerage.

Alphabet shares closed down $2.39, or 1.6 per cent, at $149.54, in New York.