Dan Niles of Niles Investment Management discusses the technology outlook on “The Claman Countdown.”
Google is set to face its second antitrust trial before the Justice Department since September 2023 on Monday, this time over its alleged monopoly power in the ad tech industry.
The Department of Justice is suing Google, alleging that the company's ad technology services create an unfair competitive playing field for competitors, creating a monopoly in the advertising sector and driving up advertising prices for customers.
For Google, advertising tech services revenue accounts for 77% of its total revenue: According to the company's annual earnings report, the tech giant is set to earn a total of $307 billion in 2023, of which $237 billion was generated through Google's advertising services.
FILE PHOTO: The Google logo hangs on Google House during the annual consumer electronics trade show CES 2024 in Las Vegas, Nevada, USA, January 10, 2024. REUTERS/Steve Marcus/File Photo/File Photo (REUTERS/Steve Marcus/File Photo/File Photo/Reuters Photo)
Federal judge rules that Google violated antitrust laws
This comes after a judge ruled in August that Google had created a monopoly in the search engine space, forcing competitors like DuckDuckGo, Bing and Yelp to address anti-competitive practices. Google has argued that its search engine is such a good product that it shouldn't be held liable for its competitors' poor practices, an argument that is expected to be made at the hearing.
Google's advertising division, which buys and sells ads and runs the largest ad exchange, has been criticized for unfair practices. The Department of Justice quoted a Google advertising executive as saying, “It's like Goldman and Citibank owning the NYSE.”
Berlin, May 25, 2023: Sundar Pichai, CEO of Google and Alphabet, attended a press conference at Google Berlin to announce that Google has become the new official partner of the women's national team. (Photo by Christoph Söder/picture alliance via Getty Images / Getty Images)
Justice Department accuses Google of unfairly dominating online search in landmark case
The Justice Department argued in court filings that Google “forced major competitors to exit the market for advertising technology tools, discouraged potential competitors from entering the market, and marginalized and unfairly disadvantaged Google's few remaining competitors.” In its response to these allegations during expected arguments, Google will argue that the case is a “backward litigation” and “out of touch with reality.”
The trial is taking place in Alexandria, Virginia, and is expected to last several weeks.
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A Google search is displayed on a mobile phone in Colombo, Sri Lanka on January 23, 2024. (Photo by Tirina Karthothej/NurPhoto via Getty Images/Getty Images)
As the final stages of the search engine lawsuit begin, the judge is working with both sides to determine a timeline for settling the case. The Department of Justice is expected to present a detailed settlement proposal to Google by the end of the year, and the judge has said a resolution is needed by August 2025.
