The US government has on its target a highly profitable ad tech sector of Google, which powers the company’s enormous fortune.
The Department of Justice presented its case in a trial on Monday, claiming Alphabet, the parent firm of the search engine, is operating an illegal monopoly in the market. Through the placement and sale of advertisements that internet users saw, the firm made over $200 billion (£152 billion) in revenue last year.
Prosecutors claim Alphabet has exploited its market dominance to suppress competitors, despite the company’s claim that the “effectiveness” of its services is the reason for its success.
“It is a really important industry that grabs billions of consumer dollars every year. I think all consumers have an interest in this litigation,” said Laura Phillips-Sawyer, a professor at the University Of Georgia School Of Law.
This is the tech giant’s second significant antitrust complaint in the United States.
It is currently unknown what penalties Google and Alphabet may incur as a result of the August court ruling that their domination of search is illegal.
In 2023, the Department of Justice (DoJ) and a group of states filed a lawsuit alleging that Google is the market leader in digital ads and has used its dominance to hinder competition and innovation. In the meantime, Google argues that it is only one of several hundred businesses that help distribute digital advertisements in front of customers.
In a blog post reacting to the DoJ’s lawsuit in 2023, it claims that competition in the digital ad industry is rising, not shrinking, citing higher ad growth and profits for businesses like Apple, Amazon, and TikTok as proof.
US District Judge Leonie Brinkema will hear arguments from both parties and is anticipated to render a decision. “Google is a monopolist, and it has acted as one to maintain its monopoly,” he wrote.
