Ad Tech Insights
Monopoly Money: DOJ Takes On Google
The story: The antitrust trial against Google kicked off on September 9th, marking the start of what could reshape the digital advertising industry as we know it. The Department of Justice (DOJ) argues that Google has monopolized multiple areas of adtech, with its case built on four main claims:
- Claim 1: Google monopolized the ad server business that publishers use to manage their ad inventory.
- Claim 2: Google monopolized the ad network business through the Google Ads product.
- Claim 3: Google has attempted to monopolize the exchange business via Google’s AdX product.
- Claim 4: Google exerted monopoly power by tying these products together.
In the words of Senior DOJ attorney, Julia Tarver, during the government’s opening statement, “Google is not here because they are big. They’re here because they used that size to crush the competition.”
Allegedly, Google’s purchase of companies like DoubleClick allowed it to lock rivals out from its AdX platform, maintaining control over a substantial market majority. Testimonies from industry players included Kevel, Gannett, and Index Exchange, who all supported the DOJ’s allegations. Gannett’s Tim Wolfe compared switching ad servers to “changing tires on a car mid-race”, illustrating the barriers that publishers face when attempting to move away from the Google ecosystem.
As the plaintiff, the DOJ gets to present its witness, and essentially, its case first. But Google’s defense was still able to poke holes in how the DOJ defines the market. Google insists that its share of the overall advertising market is lower than what the DOJ alleges, and that it is not obligated to work with competitors under favorable terms. Google also questioned the DOJ’s focus on web advertising, citing other channels like social media, where companies like Facebook and Amazon compete more directly.
But as concluded by AdWeek, the DOJ’s Day 1 witness testimonies all seemed to uphold the DOJ’s definitions of the adtech market and showcase “the difficulty other firms have competing with Google.”
The takeaway: The U.S. v. Google trial could be a major turning point for digital advertising, highlighting the challenges of competing in a market dominated by one player. For marketers and advertisers, it's a clear reminder of how platform exclusivity and limited interoperability can impact campaign strategies. While the outcome of the trial is uncertain, staying informed is crucial, as it could reshape the rules for ad serving and change the competitive landscape in the industry.
Extra Industry Insights
More takeaways from the US v. Google LLC. trial:
- U.S. District Court Judge Leonie M. Brinkema is overseeing the anticipated 4 - 6 week long bench trial (i.e., no jury present).
- Senior DOJ attorney Julia Tarver Wood began the day with opening statements for the plaintiff, alleging that publishers are “totally dependent” on Google’s ad server, with Google controlling between 87% and 91% of the ad server market depending on the geography.
- In her opening statements, Google’s lead attorney Karen Dunn countered that there is no such thing as an “open web display advertising” market. Google contends that ad servers, exchanges, and networks aren’t separate markets, and by that equation, claims it only controls 25% of the market -- below the Supreme Court’s 75% threshold for what constitutes market dominance.
- According to Witness #1 Tim Wolfe, SVP of Ad Revenue Operations at Gannett, the company has been a Google ad server customer for about 12 years and spends over $15M annually on ad tech to serve ads -- with more than $10M of that going directly to Google.
- Witness #2, Index Exchange’s CEO & President Andrew Casale testified that it’s “very challenging” to compete with AdX, pointing to the fact that Index doesn’t have the same access to programmatic guaranteed impressions. “That’s only available through Google and it makes our products look deficient.”
- Witness #3, Joshua Lowcock, who previously testified in an antitrust trial against Google this year, countered the tech giant’s claims by arguing that open web display advertising is a distinct market, and other channels -- including search, social media, native, in-app, and traditional TV -- are not a “reasonable substitute” for display.
- Kevel’s CEO & Founder James Avery served as a final witness, and recounted how Kevel had requested access to Google’s AdX twice: first around 2012 / 2013 and again just a few years ago. Both requests were denied, with Google simply responding that it "doesn’t work that way" on the initial occasion.
Kevel Catch-Up
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Keep Learning
WATCH → Digiday’s “WTF is the Justice Department’s ad tech antitrust case against Google?: A refresher” helps break down the basics of the case in this 7-minute video.
READ → Advertisers plan to withdraw from X in record numbers according to a global survey by market research firm Kantar, dealing another blow to the financial (mis)fortunes of the social media company.
LISTEN → This special episode of the AdTechGod Pod is joined by CEO and co-founder of Chalice Custom Algorithms Adam Heimlich to discuss the Google antitrust trial and its impact on the adtech industry. (Listening time: 23:12).
