As we know, Google was found guilty of illegally dominating online search in August 2024. Google in September 2024 is facing allegations of manipulation of display advertising in violation of antitrust laws. The market size is $677 billion. The Department of Justice and a coalition of eight states accuse Google of acquiring over years the tools used to buy, sell and serve ads. It locks up the technology behind website ads. This harms the publishers and advertisers.
There are two sides in digital ads. On the supply side are the websites soliciting ads by offering ad space. Google acquired DoubleClick for $3.1 billion in 2007. It offers the entire tech stack underpinning the chain of bidding, selling, user targeting and placement. The bid request from website passes through Google Ad Exchange. On the demand side are the advertisers who use tools that help them to place ads across the Web. Their placement availability bid too goes through the Google Exchange. The supply side tools from Google account for more than 90 per cert market share. The demand side tools from Google account for 80 per cent (Google Ads) and 40 per cent for Google Display and Video 360 ads.
Today it is rare to visit a website without seeing an ad that has not been handled by Google at some point in the chain. Google controls the entire chain — a tool for publishers to sell the space, a tool for advertisers to buy that space, and the software in the middle to mediate. Thus, Google dominates both supply and demand side of the ad tech market.
The trial will take place at Alexandria, Virginia. Microsoft was charged for anti-trust activity more than two decades ago. Thereafter Google was declared as an illegal monopoly in internet search. This advertising monopoly is the third case against Big Tech.
Google denies the charges and asserts that its tool work seamlessly with products made by competitors. It also further asserts that the case is based on misunderstanding of digital ads.
Though advertisers or publishers can choose alternative services to do each of these things, Google has the power to give better deals alluring users to use Google tools for all or most of the steps. Google owns highly valuable properties such as Google Search and YouTube, and advertisers must go through these. That further strengthens Google’s hold.
The UK’s Competition and Markets Authority (CMA) too is investigating those charges.
The Justice department backed by some states in the US is calling for a forced divestiture of Google’s ad tech stack. These companies should be separated into individual companies. The EU too is calling for the same.
Google may argue that its advertising market share is overstated. It may ask for protection of its proprietary ad tech.
Whether any such future divest of its parts will dent Google’s business is not clear. Google’s competitive advantage of user data, web analytics and browsing habits will be left untouched.