Google Defends Its Role in Online Advertising Market in Antitrust Trial

Google is pushing back against federal regulators’ claims that it holds an illegal monopoly over online advertising technology, arguing that the government’s accusations underestimate the intense competition in the digital advertising space. According to testimony presented Thursday by an expert hired by Google, the government has narrowly defined the market in its case against the tech giant.

Mark Israel, an economist who prepared a report for Google, testified that federal regulators have focused too heavily on a small segment of the online advertising world—specifically, “open web display advertising,” which includes the rectangular ads that typically appear on websites when consumers browse on desktop computers. According to ABC News, Israel argued that this definition ignores the broader scope of competition faced by Google in the evolving digital landscape.

Israel emphasized that advertisers have increasingly shifted their spending to social media platforms such as Facebook and TikTok, as well as to major online retailers like Amazon. He stated that when considering the entire market for online display advertising, Google’s share is much smaller than the government suggests. Per ABC News, Israel testified that Google controlled just 10% of the U.S. online display ad market in 2022, a significant decline from 15% a decade ago.

The economist also pointed to a major shift in how advertisers are reaching consumers. According to marketing data cited in his testimony, advertisers have moved away from traditional desktop and laptop ads—where the government claims Google dominates—and are now focusing their spending on mobile apps and device screens. As of 2022, spending on desktop and laptop ads had dropped from 71% in 2013 to just 17%, Israel noted.

“The government’s case seems to miss where the competition is today,” Israel said during his testimony, as reported by ABC News.

Read more: Google’s Antitrust Battles Could Take Years to Resolve, Says CEO Sundar Pichai

The trial, which is taking place in a Virginia federal court, is now in its third week. U.S. District Judge Leonie Brinkema has indicated that the government will present a brief rebuttal on Friday before the trial pauses until November. Closing arguments are expected in December, with a ruling anticipated by the end of the year.

Federal regulators have accused Google of building and maintaining a monopoly that limits choices and increases costs for both online publishers and advertisers. The government alleges that Google’s control of the advertising tech market allows it to keep 36 cents of every dollar spent on ads through its platform. Furthermore, regulators argue that Google dominates every stage of the ad-buying process, from the technology used by publishers to sell ad space, to the technology advertisers use to buy it, to the ad exchanges that run auctions to match buyers and sellers.

The government claims Google illegally ties these markets together, forcing publishers to use its technology to access its vast network of advertisers. According to the government’s case, Google controls 91% of the market for publisher ad servers and 87% of advertising networks, per ABC News.

However, Google argues that the case fails to account for its substantial investments in its advertising technology, which the company says improve the efficiency and value of ad placements for both advertisers and publishers. Google maintains that its tools deliver better results by ensuring that ads reach the right consumers, thus benefiting the overall digital advertising ecosystem.