The U.S. government is targeting Google’s highly profitable ad tech business, the core of its vast wealth, as the Department of Justice (DoJ) brings a major antitrust case against the tech giant. The trial, starting on Monday, will hear claims that Google’s parent company, Alphabet, illegally operates a monopoly in the digital advertising market.
Last year, Alphabet earned over $200 billion (£152bn) from placing and selling ads viewed by internet users. While Alphabet argues that its success is due to the “effectiveness” of its services, prosecutors allege that the company has used its market dominance to suppress competition.
“This is a really important industry that captures 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.”
This is the second major antitrust case Alphabet has faced in the U.S. In August, a judge ruled that Google’s dominance in the search market was illegal, though the penalties for Google and Alphabet have not yet been determined.
The lawsuit, filed by the DoJ and a coalition of states in 2023, claims that Google dominates the digital ad market and uses its market power to stifle innovation and competition. In response, Google contends that it is just one of many companies involved in placing digital ads and argues that competition in the digital ad space is expanding, not shrinking. Google cited the growth and increasing ad revenues of companies like Apple, Amazon, and TikTok in a 2023 blog post responding to the DoJ’s lawsuit.