Google goes on defense in antitrust suit over its online advertising business
Google continued its defense against the federal government's claims that it is on Monday as the tech giant tries to fend off more threats to its sprawling business.
It is the second major antitrust trial against one of the country's largest and most successful tech companies as part of a more aggressive approach to alleged monopolies and consumer protections It comes a month after a landmark ruling in another antitrust case that determined its is a monopoly, though it's unclear what remedies the judge could impose.
Google began its defense on Friday, seeking to rebut two weeks of arguments from DOJ attorneys who called more than a dozen witnesses seeking to prove that the company broke antitrust laws and raised costs for consumers.
A coalition of states of various political makeups have joined the Justice Department in the case, arguing Google has built an illegal monopoly over the technology that facilitates the sale of online ads.
Prior to beginning its defense and during the last two days of testimony, Google has fiercely denied the Justice Department's claims. It has argued that online advertising is a fiercely competitive space that includes other tech giants like Facebook and Amazon that the DOJ is ignoring to make its case better.
The company has also said that the claims are outdated, comparing the government's case against it as a "time capsule with a Blackberry, an iPod and a Blockbuster video card."
Google has argued the government's case focuses on a narrow section of online ads — essentially the rectangular banner ads that display on top and along the sides of a webpage — which further ignores the competition it is facing in the marketplace.
By Google's telling, Amazon, TV streaming platforms and other publishers present vast and intense competition for online advertising. Consumers have also shifted habits dramatically over the last decade, prioritizing smart phones and mobile apps over desktop sites on a computer screen.
"The industry has been exceptionally fluid over the last 18 years," Scott Sheffer, a vice president for global partnerships at Google, said during defense testimony on Friday.
In the first two weeks of the case, the Justice Department tried to prove Google has rigged the auctions of ad sales, which take place in a matter of milliseconds, to favor itself over other players in the industry. Federal government attorneys argued that the way the auctions allegedly favor Google has denied the publishing industry of hundreds of millions of dollars in revenue.
According to federal attorneys, Google sought to buy upstart competitors over the years and exerted control over the marketplace with purchases of a software company that helped cement its dominance over technology that publishers use to sell ads. The government argued that Google is involved in every stage of deals to sell ad space, pointing to an email from a former employee that compared the chain to a bank owning the New York Stock Exchange.
The department argued that the way Google runs its automated ad exchange helps benefit the company at the cost of competitors and publishers that are being deprived of the highest price for their ads.
Many of the witnesses for the government's case over the first two weeks were managers and executives at Google who were forced to defend what they wrote in internal communications and emails, most of which argued on the stand that their actions meant something different and did not create a monopoly on online advertising.
The rest of the trial is expected to take another couple weeks, and then the judge may take several months to come to a conclusion. The stakes of the decision are very high, as it could force the tech giant to break up pieces of the company. While advertising makes up a smaller piece of Google's profits, being forced to break up its platform could revolutionize online advertising and shake up the balance of power in the industry.
"By picking winners and losers in a highly competitive industry, the DOJ risks making it more expensive for small businesses to grow and for websites and apps to make money. Let's not break what's working," Google vice president of regulatory affairs Lee-Anne Mulholland said in a blog post prior to the trial starting.
