Google is on trial for allegedly abusing its dominance of the $200 billion digital promoting industry.
The U.S. Department of Justice claimed that through acquisitions and anticompetitive conduct, Google seized control of the total promoting technology (“adtech”) stack: the tools advertisers and publishers buy and sell ads and the exchange that connects them.
In response, Google denied the claims, stating several ad corporations compete within the space, a mix of tools are used in order that they don’t get the total fees, their fees are lower than the industry average and small businesses will suffer probably the most in the event that they lose this case.
The final result of the landmark case could bring significant changes to Google and publishers. However, experts argue that might seriously hurt advertisers as well.
Dig deeper: US vs. Google, round 2: Government targets digital ad business
It’s also possible the trial will lead to no changes and Google might be free to proceed operating because it wants.
Day 1: Accusations and badgering of witnesses (Sept. 9)
DOJ laid out their accusations as follows:
- Google controls the advertiser ad network.
- Google dominates the publisher ad server.
- Google runs the ad exchange connecting the 2.
Google’s defense:
- Disputed the definition of open-web display ads.
- Argued the DOJ’s market definition is “gerrymandered,” and that the DOJ is manipulating the boundaries of their definition to make Google out to be the bad guy.
- Presented a chart showing competitors like Microsoft, Amazon, Meta, and TikTok.
Bottom line. This trial could determine whether Google’s control over digital promoting constitutes an illegal monopoly, potentially affecting how information is disseminated online.
Dig deeper: What the Google antitrust ruling could mean for advertisers
Day 2: Google keeping publishers hostage & could possibly be more transparent (Sept. 10)
Stephanie Layser, former ad exec at News Corp, testifies:
- Google’s ad tools leave publishers feeling “stuck”. She explained that NewsCorp wanted to switch ad servers back in 2017, however the revenue risk was too high due to Google ads’ position.
- 40%-60% of NewsCorp revenue was from AdX, and 40%-60% of that was Google Ads demand.
- Google ad server tech is outdated but unavoidable due to the dearth of viable alternatives and the platform’s overwhelming market presence. “DFP (Google Ads Manager) isn’t a superior product – it’s a ’20-30 yr old’ piece” of “slow and clunky” tech.
Jay Friedman, CEO of Goodway Group, criticized Google’s variable pricing, describing it as “gaming the system.” His testimony highlighted Google’s inherent conflict of interest in controlling each the buy- and sell-side of the ad market.
Eisar Lipkovitz, former Google VP of Engineering, provided a candid view of Google’s internal dysfunction, noting that Google’s ad auction practices were unfair and lacked transparency.
- It was “silly” and “idiotic.” “They don’t want to do anything,” he says, “just want to discuss stuff” and “lie” or “omit information.”
He also likened Google’s dominance to a financial firm controlling the stock exchange, acknowledging the need for industry regulation.
Day 3: Google has an excessive amount of data, stifles competition (Sept. 11)
Jed Dederick, CRO on the Trade Desk (representing DV360’s most important competitor), emphasized that buy-side and sell-side interests should remain separate, highlighting the conflict in Google controlling each.
- Google’s access to vast user data (via YouTube and search) gave them a major competitive advantage, making it difficult for other platforms to thrive.
Other key themes from the day’s testimony:
- Google’s control over ad servers stifles competition and innovation (Brad Bender, Ex-Google Product Lead).
- Practices like First Look and Dynamic Revenue Share favor Google on the expense of publishers (Ravi Ramamoorthi, UC San Diego Professor).
Day 4: Google controls publisher ad prices and competition (Sept 12)
Key Players:
- Rahul Srinivasan, former Product Manager at Google, oversaw the 2019 rollout of UPR and the shift to a unified first-price auction model. His testimony make clear internal discussions to “dry out” header bidding and maintain control over ad pricing, despite publishers’ resistance.
- Rajeev Goel, CEO of Pubmatic, and Tom Kershaw, former CTO of Magnite, described the challenges of competing with Google, emphasizing how Google’s demand-side dominance hurt competition and suppressed publisher revenue.
Key Testimony Highlights:
- Google faced backlash from publishers throughout the 2019 rollout of UPR (Unified Pricing Rules), with complaints about losing control over pricing floors and transparency within the auction process.
- Internal emails revealed that Google considered lowering its take rate to ease publisher concerns but ultimately decided to push ahead with UPR, bundling it with other changes to reduce resistance.
- Rajeev Goel discussed the negative impact of Google’s first-look auction system on each publishers and advertisers, emphasizing that it suppressed competition and reduced revenue diversity.
Day 5: Trial is moving faster than expected + Google’s trial media center (Sept 13)
The trial is moving faster than expected, with DOJ now anticipating half the originally planned time to present their case. Judge Brinkema has encouraged either side to streamline their arguments, especially across the highly debated “header bidding” topic.
Key Players:
- Tom Kershaw (Former CTO, Magnite) highlighted how publishers depend on Google’s ad servers despite alternatives like Prebid. He compared using only Prebid demand to “ravenous to death,” emphasizing publishers’ limited options.
- Chris LaSala (Former manager, Google) shared internal discussions revealing Google’s awareness of its high take rates and the importance of its unique demand, pushing to commoditize its ad exchange business slightly than “extracting high rent.”
- Brian Boland (Former VP, Meta) discussed Facebook’s concerns over Google’s preferential treatment of its ad exchange and FAN’s struggle to compete within the open web display space, ultimately leading to FAN’s exit from that market.
Google has created a “trial media center” website where they post documents related to the case. It is unclear if all trial documents are made available there. Google hasn’t widely publicized the placement of those documents. It was spotted and shared by Arielle Garcia, director of intelligence at digital promoting watchdog Check My Ads, on X.
What’s next. The trial is predicted to last a number of weeks. If the DOJ wins, Google could face up to $100 billion in advertiser lawsuits.
Dig deeper. You can dig deeper into trial updates on the United States vs. Google website.
The other huge Google antitrust trial. In August, a federal judge ruled in a separate case that Google violated antitrust law.
This article might be usually updated with the newest developments from this landmark trial.
The post Google adtech antitrust trial: Everything you need to know appeared first on MarTech.
Read the total article here
