The crux of Google’s defense in its antitrust trial, which began on Monday in Alexandria, Va., revolves around whether the technologies that drive online advertising should be considered part of a unified market or separate markets. This distinction is crucial to determining the outcome of the case brought by the US Justice Department.
“Market definition is often pivotal in antitrust cases and can significantly influence the final ruling,” explained Dan McCuaig, a former DOJ antitrust attorney now with Cohen Milstein.
The trial follows a setback for Google in August when a judge in Washington, D.C., ruled that the tech giant had unlawfully monopolized the online search engine market. For Google, framing the market broadly could help counter claims that it has monopolized online advertising technology, thus violating antitrust laws.
“The DOJ is attempting to narrowly define the market,” said Google’s lawyer Karen Dunn from Paul, Weiss, Rifkind, Wharton & Garrison. Dunn argued that the government’s approach artificially segments the market to undermine the availability of alternative online advertising services, potentially misrepresenting the broader landscape.
McCuaig noted that Google’s reliance on a Supreme Court case involving American Express, which viewed credit card networks as a single market with two sides, might not be persuasive in this instance.
According to the DOJ, companies involved in automating the sale and purchase of online ads—known as “open web display ads”—operate in distinct markets, including the publishing ad server market, the ad exchange market, and the advertiser ad network market. These technologies facilitate ad space management on websites and mobile pages, real-time auction processing, and automated ad placements.
Google’s defense, however, argues that these technologies are components of a larger online advertising market, which encompasses both algorithm-driven auctions and traditional, human-mediated ad transactions.
Testifying on behalf of the government, James Avery, CEO of ad tech firm Kevel, described his company’s focus on the publisher side of the industry, distinguishing it from other parts of the ad tech ecosystem. Avery noted that his company stopped competing with Google due to the latter’s restrictive practices that limited access to its inventory.
Joshua Lowcock, president of advertising data firm Quad, testified that “programmatic” display ads differ from ads on proprietary platforms like Facebook or TikTok, which use their own internal auction systems. Lowcock emphasized that different ad platforms are not direct substitutes.
Further complicating matters, Eric Mahr, another Google attorney, left open the possibility for Google’s case to present its own witnesses after the DOJ rests. The trial, which might extend beyond the duration of the previous search monopoly case, will ultimately assess whether Google’s practices harmed consumer welfare by analyzing potential market substitutions.
Antitrust expert Alden Abbott questioned the DOJ’s market segmentation, suggesting that competitors like Microsoft, TikTok, and Yahoo should be considered part of a broader market and that the case might fail if it cannot demonstrate direct consumer harm.
As the trial unfolds, the key issue remains whether Google’s practices fall within a broader market framework or within narrower, more segmented markets defined by the DOJ.
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