The U.S. Department of Justice's antitrust trial against Google began on Monday, with the first day focusing on the tech giant's influence over publishers through its dominant position in the digital advertising market.
Digiday Reports The long-awaited antitrust trial between the Department of Justice and Google began Monday in the U.S. District Court for the Eastern District of Virginia. Considered by many to be the “trial of the century” for the digital media world, the case could lead to the collapse of Google's empire as the Justice Department seeks to sell off Google's sell-side advertising technology tools.
In her opening statement, Justice Department attorney Julia Tarver Wood argued that Google “earned its way to success” and compared the company's monopolistic practices to a scheme “as old as monopoly itself.” She stressed that it is publishers who have paid the price for Google's dominance in the ad tech market.
Google lawyer Karen Dunn fired back, accusing the Justice Department of “gerrymandering” in its definitions of various markets, and suggested there is still plenty of competition in the advertising tech industry, especially with the advent of AI.
The Justice Department's legal team focused on demonstrating publishers' reliance on Google and quantifying the company's control over the industry. Tim Wolf, Gannett's senior vice president of revenue operations, revealed that the company pays about $15 million a year in revenue sharing on programmatic ad revenue, of which Google accounts for more than $10 million. At its peak, Google accounted for about 60% of Gannett's programmatic ad revenue, and it still accounts for about 50% today.
Wolf also spoke about the adoption of header bidding, an ad tech hack designed to help publishers escape Google's stranglehold on programmatic advertising. When Gannett adopted header bidding as its primary sales method, it saw a 15-20 percent increase in CPMs. But Wolf emphasized how difficult it will be for publishers to escape Google's stranglehold, likening switching away from Google's ad server to “changing tires on a race car while it's racing.”
Other key points from the first day of trial include:
1. Quad Media's Joshua Lowcock (formerly head of digital at UM) explained the complexities of the various ad markets at issue, but Google tried to poke holes in his testimony during cross-examination.
2. The Department of Justice plans to call several other witnesses in the coming days, including executives from Goodway Group, OMD, Facebook and The Trade Desk.
3. Google plans to call witnesses from various government agencies, including the U.S. Postal Service, the U.S. Army, the U.S. Navy, the U.S. Census Bureau, and the U.S. Department of Veterans Affairs.
The antitrust case against Google comes on the heels of a ruling by the UK Competition and Markets Authority that found Google abused its dominant position by restricting competition by operating both a publisher ad server and buying tool, and as Google prepares to appeal a separate antitrust ruling against its search empire. These events have led many to believe the online advertising industry could be undergoing major change in the coming weeks.
As the trial continues, the Department of Justice will attempt to prove that Google's business practices and corporate culture circumvent the rules of fair competition, while Google will likely defend its position and argue that the ad tech industry remains competitive. The outcome of this landmark case could have far-reaching implications for publishers, advertisers, and the entire digital media industry.
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Lucas Nolan is a reporter for Breitbart News covering free speech and online censorship.
