Google's $200 billion ad tech business targeted by US government in monopoly trial

The US government is targeting the core of Google's vast wealth – its highly profitable ad tech business.

A trial starting on Monday will see the Department of Justice present its case that Alphabet, the parent company of the search engine, operates an illegal monopoly in the ad tech market.

The company generated over $200 billion (£152bn) last year from placing and selling ads viewed by internet users.

Alphabet has defended its success by attributing it to the "effectiveness" of its services, but prosecutors claim the company has used its dominant position to suppress competition.

“It is a really important industry that grabs billions of consumer dollars every year,” said Laura Phillips-Sawyer, a professor at the University of Georgia School of Law.

“I think all consumers have an interest in this litigation."

This is the second major antitrust case the tech giant has faced in the US.

In August, a judge determined that Google's dominance in search was illegal, though the penalties Alphabet and Google will face as a result of this ruling are still unknown.

According to the lawsuit filed by the Department of Justice (DoJ) and a coalition of states in 2023, Google holds a dominant position in the digital ad market and has used its power to stifle competition and hinder innovation.

Google, on the other hand, claims it is just one of many companies that help place digital ads in front of consumers.

It also argues that competition in the digital ad market is increasing, not decreasing, pointing to the growth of ad revenue for companies like Apple, Amazon, and TikTok, as mentioned in a blog post responding to the DoJ's lawsuit in 2023.

Both parties will present their arguments to US District Judge Leonie Brinkema, who will eventually issue a ruling.

This bench trial follows a significant decision last month in another monopoly case brought by the Justice Department against Google.

Judge Amit Mehta ruled that Google had acted unlawfully to suppress competition in its online search business.

“Google is a monopolist, and it has acted as one to maintain its monopoly,” he wrote.