In a recent antitrust trial in Alexandria, Virginia, Google is facing allegations of holding an illegal monopoly over advertising technology that matches online advertisers to publishers. An expert hired by Google testified that the government’s claims are focused on a narrow market segment, while failing to consider competition from social media companies like Facebook and TikTok, as well as online retailers like Amazon. According to the expert, Google’s share of the U.S. online display advertising market is only 10%, down from 15% a decade ago, when accounting for all online display advertising, not just the segment defined by the government’s case.
The expert also pointed out that advertisers have shifted their spending away from desktop and laptop devices where Google allegedly controls the market, towards ads placed on apps and mobile device screens. Data presented showed a decrease in display ad spending on desktop and laptop devices from 71% in 2013 to 17% in 2022. This shift in consumer behavior was highlighted to emphasize that the government’s case may be missing where the competition is in today’s digital advertising landscape. The testimony comes as Google wraps up its defense in the antitrust trial, with expected closing arguments in December and a ruling by the end of the year.
The government’s case against Google alleges that the tech giant has built and maintained an illegal monopoly that restricts choices and inflates costs for online publishers and advertisers. Google is accused of controlling every aspect of the advertising technology process, from the technology used by publishers to sell ad space, to the technology used by advertisers looking to purchase ad space, and the ad exchanges in between. The government claims that Google ties these markets together, forcing publishers to use Google’s technology to access its large cache of advertisers. Data presented by Google suggests that its products generate better value for publishers and advertisers by matching the right advertisers to the right consumers, resulting in increased revenue for publishers and lower costs for advertisers.
In response to the government’s claims, the expert hired by Google disputed the assertion that Google takes 36 cents on the dollar for every ad bought and sold through its ad tech stack, stating that the actual percentage has dropped to 31% or 32% in recent years. The expert also pointed out that competitors in the industry have higher take rates, with an average of 42 cents on the dollar. Google’s ongoing investments in improving the quality of ads and matching advertisers to consumers based on their interests and purchase history were highlighted as factors contributing to the value generated for publishers and advertisers. The trial in Virginia is separate from another antitrust case where Google’s search engine has been declared a monopoly, with potential remedies still pending.
