Over the past week, Google has called more than a dozen witnesses to defend itself against claims by the Justice Department and a group of state attorneys general that the company has a monopoly over the advertising software that places ads on web pages. Antitrust case against tech giant.
Google’s lawyers finished their arguments in the case on Friday, and the government is expected to file a counter-argument. Judge Leonie Brinkema of the U.S. District Court for the Eastern District of Virginia, who is presiding over the non-jury trial, is expected to issue a ruling by the end of the year after both sides have written their case and make closing arguments.
According to the US and others, the government finished its main arguments in the case last week. v. Google, filed last year, accuses Google of creating a monopoly over the technology that places ads on websites on the Internet.
The company’s defense has centered on how its actions were justified and how they helped publishers, advertisers and competitors. Google’s main claims are:
How did Google argue that its actions were legitimate?
The Justice Department and some states have accused the company of abusing its control over advertising technology and violating antitrust laws through its 2008 acquisition of advertising software company DoubleClick. The government alleged that Google harmed publishers by jacking up ad prices and taking a large cut of each sale.
But Google’s lawyers countered that the ad tech industry is highly competitive. They also accused the Justice Department of ignoring rivals such as Facebook, Microsoft and Amazon to make their case more convincing.
At the center of the lawsuit is the Internet giant’s suite of advertising tools that websites around the world use to sell ads on their sites. This technology conducts an instantaneous auction to serve ads each time a user loads a page.
Google’s lawyers called in experts to make the company’s case. Paul Milgrom, a Nobel Prize-winning economics professor at Stanford University, testified that Google’s actions from 2013 to 2019 were not anticompetitive.
Google’s lawyers also called Judith Chevalier, an economics professor at Yale University, to argue that the company’s pricing was justified.
In a marketplace where companies buy and sell advertising, Google takes about 20% of the transaction as a commission, Chevalier said. That’s only slightly higher than the industry average of about 16% calculated by one of the Justice Department’s expert witnesses, she said.
Dr. Chevalier compared these “take rates” in the U.S. advertising market, where ad exchange fees are higher than in other parts of the world. He added that many of the exchanges whose names were redacted were charging higher fees than Google.
In cross-examination, Justice Department lawyers argued that Chevalier’s calculations also led Google to overcharge its customers.
How Google says it helped people and promoted competition
The company’s lawyers argued that Google’s product would increase transparency in ad buying and selling and increase revenue for publishers.
Nitish Korla, a former Google Ads engineering lead, testified that the company is not designing tools to dominate the industry, but rather respond to dynamic competitors and publisher demands.
“A big part of Google’s work is facilitating matches between publishers and advertisers,” Korla said.
Google executives testified that the company has dedicated thousands of employees and millions of dollars to fighting ad fraud and spam to help consumers and competitors. The company argues that splitting up Google’s advertising division would weaken the company’s ability to fight those who would commit crimes.
Google’s director of product management, Per Bjorke, said Google’s comprehensive advertising platform “makes it much easier to fight spam.”
He compared Google to a credit card company, saying it can’t stop fraudulent activity unless it knows the details of the transaction.
Government lawyers argued that advertising industry groups and companies also battle fraud, piracy and malware, and that competitors sometimes alerted Google to suspicious activity on its platform.
Google insists publishers and advertisers have plenty of choice
The company’s lawyers said the company is not trapping advertisers and publishers in an unfair system. Google witnesses testified that the company offered a wide range of advertising tools for customers to choose from.
Sarah Stefaniou, a Google employee who previously worked as an advertising manager at the company, testified that advertisers can choose from a variety of products depending on their needs.
Government lawyers argue that Google is a central player in online display advertising, the kind of promotion that appears alongside articles on news websites. Google’s lawyers called this an inaccurate framework for the ad market, saying display ads come in a variety of formats and can appear virtually anywhere.
On Wednesday, the company’s lawyers played video of a deposition from Todd Parsons, chief product officer at Criteo, one of Google’s advertising rivals. He said display advertising is becoming more popular on social media sites such as Instagram and Facebook, as well as on smart TVs.
Adam Stewart, Google’s vice president who oversees some of the largest ad sales, testified in 2019 that the company was concerned about its competitiveness in display advertising.
Stewart said while Google’s lawyers showed internal documents on the competitive landscape, the company “knew it was losing market share” to Facebook and rival ad tech company TradeDesk.
