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A second DOJ suit against Google seeks to break up its ad tech empire

The news: The Department of Justice’s (DOJ) second antitrust trial against Google began yesterday, kicking off another lengthy legal battle between regulators and the advertising giant.

  • Unlike this summer’s landmark case, which ended in a ruling that Google operates a search monopoly, the DOJ and 17 states are charging that the company illegally monopolized the online display ad sector.
  • The outcome of this summer’s ruling is still unclear, but this lawsuit has clear consequences: The DOJ is seeking to force Google to divest some of its ad tech properties including Ad Manager, an ad space management platform for publishers through which Google takes a cut of sales.

The background: The DOJ accuses Google of operating a monopoly for digital display ads, positioning itself as a crucial intermediary between websites and advertisers and using its market power to stifle competition.

  • One of the claims in the suit is that Google’s 2008 acquisition of ad tech firm DoubleClick for $3.1 billion allowed it to gain an unfair advantage by integrating it with existing Google ad exchanges, forcing advertisers and publishers to become locked into its ecosystem.
  • Google also landed in hot water before the trial even began: A company policy about deleting internal communications was framed by the judge in the case as an attempt to delete evidence.
  • Google has said that most ad spending has shifted from programmatic and display ads to connected TVs (CTVs), where it argues it does not have an advantage.

Our take: The second major antitrust trial against Google comes at an inconvenient time. This summer’s search monopoly ruling could have profound consequences for the company’s structure, and further blows to its key assets could hurt Google’s efforts to fund AI development.

  • US regulators are turning unprecedented attention toward the internet giant, and so are those abroad: The UK’s Competition and Markets Authority claimed last week that Google self-preferences its own ad exchanges and overcharged advertisers.
  • Similar findings emerged during the previous DOJ trial: Google executives admitted that the company quietly increased ad prices by as much as 10%, while some advertisers complained about even higher price hikes.

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