Google and the US Justice Department each believe the other wants too much of one thing: control.
“Control is the defining characteristic of a monopolist,” DOJ counsel Julia Tarver Wood said during opening statements in the federal government’s second antitrust trial against the search giant, which kicked off Monday in Alexandria, Virginia. To the government, Google exerts too much control over every step in the way publishers sell advertising space online and how advertisers buy it, resulting in a system that benefits Google at the expense of nearly everyone else.
To Google, the government is seeking control over a successful business by making it deal with rivals on more favorable terms, disregarding the value of its investments in technology and the unique efficiencies of its integrated tools.
By the end of the trial, which is expected to last several weeks, US District Court Judge Leonie Brinkema will be left to decide which side is exerting too much control — and ultimately, if Google has illegally monopolized the markets for advertising technology.
Markets is a key word, since one question raised on the first day is how many monopolies Google might actually have. (A federal court in DC says at least one, since it recently ruled Google a monopolist in search.) The DOJ is arguing that Google has monopoly power in three different ad-related markets: those for publisher ad servers (where websites hawk ad space), ad exchanges (which facilitate ad transactions), and advertiser ad networks (where advertisers go to buy ad space). They’re also arguing that Google illegally tied together its publisher ad server with its ad exchange to maintain its monopoly power.
“One monopoly is bad enough,” Wood said during opening statements. “But a trifecta of monopolies is what we have here.”
Google says it’s not a monopolist, and in fact there’s only one market: a two-sided market made of buyers and sellers of online ad inventory. In opening arguments, its counsel said the government is ignoring relevant Supreme Court precedent that says this is the best way to view such a market. The company also argues regulators are carving up the field with terms like “open web display advertising,” which Google calls contrived. What the government really wants here, Google claims, is to require it to deal with its rivals — something the Supreme Court has said isn’t really the job of the judicial system ( Google and DOJ ).
After opening statements, the DOJ began calling its first witnesses, focusing on the tools publishers use to monetize display ads. These are the ads that typically pop up at the top or the side of the page on news websites and blogs, populating through super-quick auctions that run while the page loads. During marketing, ad exchange helps publishers and advertisers on things like content and pricing without human intervention. This process is called programmatic advertising, and it’s used by The Verge’s parent company, Vox Media, and many others. (Ryan Polley, Vox Media’s head of revenue and growth, was on the list of possible observers but was not invited today.)
Google tools are central to the process , some of which have 90 percent of the market. . According to officials, Google has a publisher ad server called Google Ad Manager (formerly DoubleClick for Publishers or DFP) that helps publishers buy ad space. It runs an ad exchange called AdX that manages the exchanges. And this is an advertising network that combines three main products in different areas of the media world. Four industry players identified on Monday are publishers (Tim Wolfe, vice president of revenue at Gannett), exchange (Andrew Casale, president and CEO of Index Exchange), traders (Joshua Lowcock, chief of those media in Quad) and the media network. Publisher (James Avery, founder and CEO of Kevel). Through these recommendations, the government sought to confirm that programmatic advertising is not something that publishers can easily replace with other forms of advertising, including direct advertising and social media advertising. . So we included the idea that switching from Google tools is not an easy decision, although there are reasons.
