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United States v. Google LLC (2023)

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This article is about the antitrust suit targeting Google's digital advertising practices. For the suit targeting Google's search engine practices, see United States v. Google LLC (2020). For other lawsuits, see United States v. Google.

United States v. Google LLC
CourtUnited States District Court for the Eastern District of Virginia
Full case nameUnited States, Commonwealth of Virginia, State of California, State of Colorado, State of Connecticut, State of New Jersey, State of New York, State of Rhode Island and State of Tennessee v. Google LLC
StartedJanuary 24, 2023
Docket nos.1:23-cv-00108
DefendantGoogle LLC
Counsel for plaintiffJulia Tarvard Wood[1]
PlaintiffUnited States Department of Justice
Court membership
Judge sittingLeonie M. Brinkema

United States v. Google LLC is an ongoing federal antitrust case brought by the United States Department of Justice (DOJ) against Google LLC on January 24, 2023.[2] The suit accuses Google of illegally monopolizing the advertising technology (adtech) market in violation of sections 1 and 2 of the Sherman Antitrust Act of 1890. The suit is separate from the DOJ antitrust case launched in 2020 that accuses Google of an illegal monopoly in the search engine market.

Filed in the U.S. District Court for the Eastern District of Virginia, the suit aims to force Google to sell off significant portions of adtech business and require the company to cease certain business practices.[3] The trial began on September 9, 2024.[4]

Background

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From left to right: logos for the Google Ad Manager advertising exchange platform, Google Ads online advertising platform, and the Google Marketing Platform analytics platform

Growth of Google's adtech business

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Beginning in the 2000s, Google gradually increased its presence in the adtech market, with the company acquiring DoubleClick, Invite Media, and AdMeld.[5] The acquisition of DoubleClick received criticism from privacy groups including the Electronic Privacy Information Center (EPIC), who petitioned the Federal Trade Commission (FTC) to scrutinize the deal.[6] The FTC ultimately approved the $3.1 billion acquisition of DoubleClick in December 2007.[7]

By 2021, Google's adtech division was the company's second largest business behind Google Search, generating approximately $31.7 billion in revenue for the company.[3] As of 2023, Google's advertising business generated an estimated 80% of the company's revenue.[8]

Jonathan Kanter, the Assistant Attorney General for the Antitrust Division, likened Google's dominance in the adtech market to a situation in which Goldman Sachs or Citibank owned the New York Stock Exchange.[9]

In August 2024, following a ruling by Judge Amit P. Mehta that Google monopolized the online search market, the Justice Department began considering remedies, including a potential breakup of Google’s business units like Chrome and Android, and other measures to curb Google’s dominance in AI products and online advertising. The DOJ is also contemplating enforcing measures that would prevent Google from maintaining exclusive contracts and might require the company to divest certain assets or share its data with competitors, particularly in the online search and advertising sectors.[10][11][12]

Legislative scrutiny

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During the 117th United States Congress, a bipartisan coalition of U.S. Senators introduced legislation aimed at breaking up Google and other "Big Tech" companies alleged dominance in the market.[13] The legislation, known as the Advertising Middlemen Endangering Rigorous Internet Competition Accountability (AMERICA) Act, was reintroduced in the 118th Congress.[14]

The ruling against Google is seen as a significant win for antitrust enforcement in the U.S., setting a precedent for how the government might tackle monopolistic practices in the tech industry. Analysts suggest that the potential remedies could have a profound impact on the digital advertising landscape and the broader tech ecosystem.[15]

Early proceedings (2023-2024)

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Following the filing of the lawsuit, the DOJ claimed it has documentation that would bolster its case. This includes an alleged statement by a Google advertising executive who took issue with the company "owning the platform, the exchange and a huge network", who compared it to if Goldman Sachs or Citibank owned the New York Stock Exchange (NYSE).[3] In what has been described as an unconventional move for a federal antitrust lawsuit, the DOJ has pushed for a jury trial for the case.[16]

Positions of U.S. states on the lawsuit as of April 18, 2023
  States that filed alongside the DOJ against Google on January 14, 2023
  States that joined the lawsuit after January 14, 2023

In March 2023, judge Leonie Brinkema denied Google's request to move the lawsuit from the District Court for the Eastern District of Virginia to a venue in New York, which is considered a more favorable venue for Google.[17] In March 2023, Google filed a motion to dismiss the case.[18] Brinkema denied this request in April 2023, who stated that the DOJ's initial complaint sufficiently detailed for the case to proceed.[5][19]

In August 2023, Google's pushed for the recusal of Assistant Attorney General Kanter from the case, arguing Kanter's past representation of Google's rivals in private practice meant he was unfairly biased against the company.[20] Brinkema denied Google's effort to force Kanter's recusal in September 2023, describing the company's bias claims as "essentially a red herring defense".[21]

In February 2024, it was announced that the case would begin trial on September 9, 2024.[22] Following a dispute between the DOJ and Google in the 2023 search trial regarding the release of public exhibits pertaining to the case, Brinkema urged both parties to resolve any similar dispute ahead of the 2024 trial.[23]

On April 26, 2024, Google filed a motion seeking summary judgement in the case. In the motion, Google accused the DOJ's of improperly calculating Google's share of the digital advertising market.[24]

On May 16, 2024, Google asked the court to strike the jury trial demand made by the DOJ, as they had compensated all U.S plaintiffs for the appropriate damages.[25] After hearing from both sides, the court ruled in favor of Google, ordering for the trial to take place before a magistrate judge instead of a jury.[26]

State partnerships

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The lawsuit was filed in conjunction with the attorneys general of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia on January 24, 2023.[2] Tennessee Attorney General Jonathan Skrmetti, a Republican, stated that Tennessee is proud to be part of this bipartisan effort to hold Google accountable and protect consumers from its harmful ad tech monopoly."[27]

On April 3, 2023, Washington Attorney General Bob Ferguson announced that the state would join the lawsuit.[7] On April 18, 2023, nine additional states joined the lawsuit, bringing the total to eighteen: Arizona, Michigan, Nebraska, Illinois, Minnesota, New Hampshire, North Carolina, Washington, and West Virginia.[28]

Trial

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The trial began before Judge Brinkema on September 9, 2024, and is expected to last for several weeks.[4] In opening arguments, lead DOJ attorney Julia Tarver Wood said that Google had used its acquisitions of ad software companies like DoubleClick and AdMeld to shore up an 87% market share in the ad-selling industry, stifling competition and hurting both consumers and publishers in the process.[29] Wood further claimed that Google locks customers into using their products and controls how transactions are made within the ad-tech market.[30][31]

Google's lead attorney Karen Dunn countered by saying that people use Google's products simply due to the fact that they are "simple, affordable, and effective,"[32] and that case was an assault on essential tools that publishers and advertisers relied on.[33]

Week 1

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The first week of the trial largely focused on how Google's ad-tech products worked together to conduct behind-the-scenes "millisecond ad auctions."[34] After opening arguments, prosecutors called Gannett executive Tim Wolfe to the stand as their first witness.[35] Wolfe testified that companies like Gannett feel as if they have "no choice" but to use Google's products, despite them knowing that they are on the losing end of the deal.[32] Prosecutors then called former News Corp executive Stephanie Layser to the stand, who said that the company in 2017 estimated that they would have lost around $9 million by moving away from Google's ad-tech products, raising an appearance of captivity on Google's end.[36][37] On September 11, court documents were presented that showed former Google executive David Rosenblatt telling his colleagues in 2009 that the goal for Google's online advertising business was to "crush" the competition.[38] These documents were then corroborated by former DoubleClick executive Brad Bender,[38] with witnesses also adding that Google's 20% ad revenue fee was the "highest in the industry."[39]

Internal documents further showed that Google knew that publishers would "balk" when it implemented measures in 2019 to prevent the diverting of profits to rival competitors,[40] with the DOJ attemepting to illustrate that Google had ignored the preferences of its customers to strengthen their own business position.[41] These measures, witnesses testified, involved unified pricing rules and header bidding, a term for the process in which publishers skirted around Google's ad exchange auctions.[42] Trial testimony and documents showed that for years, Google had given its ad exchange, AdX, preferential treatment when it came to matching a publisher's proposed floor price.[34] Professor Ramamoorthi Ravi of Carnegie Mellon University testified that rules imposed by Google "seem to have been designed to advantage Google's own products."[34] Prosecutors also called Brian Boland, a former Facebook ad chief, who testified that Facebook initially had planned to challenge Google in the industry, but pulled out and instead made a deal with them in 2018 due to their conclusion that they wouldn't be able to compete.[43]

Reaction and analysis

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Lawmakers from both parties, including Senators Amy Klobuchar (D-MN) and Josh Hawley (R-MO), spoke positively about the lawsuit.[44] Polling by YouGov in conjunction with The Economist found that Americans approved of the lawsuit by a 41% to 19% margin, with 40% stating they were "not sure".[45]

Google denied the DOJ's allegations, with a company spokesperson accusing the department of trying to unfairly "pick winners and losers in the highly competitive advertising technology sector."[46] The Chamber of Progress, a tech industry trade group whose membership includes Google, argued that the lawsuit is misguided amid a declining advertising market.[47]

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Commentators have argued that the basis of the DOJ's case is rooted in a relatively "traditional" interpretation of antitrust law, as opposed to more "novel" theories of anti-competitive harms associated with the New Brandeis movement.[48] The editorial board of The Washington Post praised the lawsuit as "good, old-fashioned antitrust enforcement" in a February 2023 article.[49]

William Kovacic, a former Republican member of the FTC, has argued that the suit is a serious one that "adds another important complication to Google's efforts to deal with regulators worldwide."[3] Douglas Melamed, who served in the DOJ Antitrust Division during the Clinton Administration, argued that the DOJ "would get a remedy that's going to shake up the market" if able to prove their claim in court. However, Melamed cautioned observers from assuming that the DOJ would win the case.[50]

Analysis of jury trial request

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Commentary surrounding the DOJ's request for a jury trial in the lawsuit has often described the decision as unusually and potentially risky. A January 2023 article in Bloomberg News suggested that the "surprising request" was made due to DOJ concerns about a hostile judicial environment.[16] According to Harry First of the New York University School of Law, the DOJ's effort to "seek damages and demand a jury trial in a monopolization case is unprecedented".[51]

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According to The New York Times, the lawsuit is the fifth antitrust suit filed against Google by either the federal government or states attorney general since 2020.[3] The DOJ filed a separate antitrust case in October 2020 accusing Google of unlawfully monopolizing the search market.[52] Google's dominant position in the adtech market has additionally received legal scrutiny in both the European Union and the United Kingdom.[53]

State of Texas v. Google, LLC (2020)

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The case has been compared to a separate, state-led antitrust lawsuit targeting Google's adtech practices filed in 2020.[24][54] The aforementioned lawsuit, led by the Texas Attorney General's office, accuses Google of unlawfully abusing its dominance in digital advertising.[55]

In April 2024, the DOJ requested to file a statement of interest in the case during the discovery process.[56] The State of Texas v. Google, LLC is expected to go to trial in Plano, Texas on March 31, 2025 before judge Sean D. Jordan, and will be held over a four week period.[57]

See also

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References

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  1. ^ Scarcella, Mike (January 25, 2023). "Justice Dept. team suing Google includes longtime Paul Weiss partner". Reuters. Retrieved September 9, 2024.
  2. ^ a b "Justice Department Sues Google for Monopolizing Digital Advertising Technologies". United States Department of Justice. January 24, 2023. Retrieved March 31, 2023.
  3. ^ a b c d e McCabe, David; Grant, Nico (January 24, 2023). "U.S. Accuses Google of Abusing Monopoly in Ad Technology". The New York Times. ISSN 0362-4331. Retrieved March 31, 2023.
  4. ^ a b Elias, Jennifer (September 6, 2024). "Google's second antitrust trial could help shape the future of online ads". CNBC. Retrieved September 9, 2024.
  5. ^ a b Montoya, Karina (March 9, 2023). "How Three Mergers Buttressed Google's Ad Tech Monopoly, Per DOJ". Tech Policy Press. Retrieved March 31, 2023.
  6. ^ "Privacy Groups Challenge Google-DoubleClick Deal". CNBC. April 27, 2007. Retrieved March 31, 2023.
  7. ^ a b Bartz, Diane (December 20, 2007). "Google wins antitrust OK to buy DoubleClick". Reuters. Retrieved March 31, 2023.
  8. ^ Bartz, Diane; Shepardson, David (January 24, 2023). "U.S. targets Google's online ad business monopoly in latest Big Tech lawsuit". Reuters. Retrieved April 28, 2024. Google, whose advertising business is responsible for about 80% of its revenue, said the government was "doubling down on a flawed argument that would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow.
  9. ^ Sisco, Josh (January 24, 2023). "Google accused of monopolizing $250B U.S. digital ad market". POLITICO. Retrieved April 5, 2023.
  10. ^ Shepardson, David; Scarcella, Mike (August 6, 2024). "Google has an illegal monopoly on search, US judge finds". Reuters. Retrieved August 14, 2024.
  11. ^ "US Considers a Rare Antitrust Move: Breaking Up Google". Bloomberg.com. August 13, 2024. Retrieved August 14, 2024.
  12. ^ McCabe, David; Grant, Nico (August 13, 2024). "U.S. Said to Consider a Breakup of Google to Address Search Monopoly". The New York Times. ISSN 0362-4331. Retrieved August 14, 2024.
  13. ^ Fung, Brian (May 19, 2022). "US senators target Big Tech's digital advertising machine with new legislation | CNN Business". CNN. Retrieved March 31, 2023.
  14. ^ "Bipartisan US lawmakers introduce bill aimed at Google, Facebook ad clout". Reuters. March 30, 2023. Retrieved April 5, 2023.
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  16. ^ a b Birnbaum, Emily; Nylen, Leah (January 27, 2023). "Google Faces Rare Jury Trial in DOJ Bet on Public's Tech Unease". Bloomberg. Retrieved April 5, 2023.
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  18. ^ Zakrzewski, Cat (March 27, 2023). "Google seeks dismissal of Justice Dept. lawsuit alleging an ad monopoly". Washington Post. Retrieved March 30, 2023.
  19. ^ "Judge rules against Google, allows antitrust case to proceed". AP News. April 29, 2023. Retrieved April 28, 2024.
  20. ^ Fung, Brian (August 31, 2023). "Google targets DOJ antitrust chief with bias allegations in monopoly defense | CNN Business". CNN. Retrieved April 28, 2024.
  21. ^ Rizzo, Salvador; Dou, Eva (September 15, 2023). "Judge rejects Google claim that DOJ's Jonathan Kanter is improperly biased". Washington Post. Retrieved April 28, 2024.
  22. ^ Fung, Brian (February 5, 2024). "DOJ antitrust case targeting Google's ad-tech business will go to trial in September, federal judge rules". CNN. Retrieved February 20, 2024.
  23. ^ Montoya, Karina (February 26, 2024). "The Countdown to the Google Ad Tech Trial Is On: Here's What You Need to Know". Tech Policy Press. Retrieved April 28, 2024. During the conference, which set the scene for what to expect before and during the trial, Judge Brinkema urged the Department of Justice (DOJ) and Google to solve any disputes about posting exhibits for the public record ahead of time, after acknowledging that disagreements over this matter in the Google Search case delayed both the trial and access to public records. "I do not want to see this same problem happen [...] This trial will not stop to resolve this [matter]," she said.
  24. ^ a b Nylen, Leah (April 27, 2024). "Google Seeks to Throw Out Ad Tech Antitrust Case Before Trial". Bloomberg. Retrieved April 28, 2024.
  25. ^ Scarcella, Mike (May 20, 2024). "Google cuts mystery check to US in bid to sidestep jury trial". Reuters. Archived from the original on June 28, 2024. Retrieved August 26, 2024.
  26. ^ Barakat, Matthew (June 7, 2024). "Judge rather than jury will render verdict in upcoming antitrust trial". AP News. Archived from the original on June 7, 2024. Retrieved August 26, 2024.
  27. ^ "Tennessee Attorney General joins suit against Google". The Daily Times. January 28, 2023. Retrieved April 21, 2023.
  28. ^ Singh, Kanishka (April 17, 2023). "Nine more US states join federal lawsuit against Google over ad tech". Reuters. Retrieved April 21, 2023.
  29. ^ McCabe, David (September 9, 2024). "U.S. Argues Google Created Ad Tech Monopoly". The New York Times. Retrieved September 9, 2024.
  30. ^ Godoy, Jody (September 9, 2024). "Google aimed to control web ad tech, US prosecutor says as trial begins". Reuters. Retrieved September 9, 2024.
  31. ^ Dou, Eva; Rizzo, Salvador (September 9, 2024). "News publishers in spotlight at Google's latest monopoly trial". The Washington Post. Retrieved September 9, 2024.
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  33. ^ Fung, Brian (September 9, 2024). "Google's search business was deemed a monopoly. Now its ad business is on trial". CNN. Retrieved September 9, 2024.
  34. ^ a b c Karakat, Matthew (September 13, 2024). "Google's millisecond ad auctions are the focus of a monopoly claim". The Associated Press. Retrieved September 14, 2024.
  35. ^ "Google faces US antitrust lawsuit over ad tech". Al Jazeera. September 9, 2024. Retrieved September 9, 2024.
  36. ^ Godoy, Joey (September 10, 2024). "News Corp would have lost $9 million in 2017 by ditching Google ads, ex-exec testifies". Reuters. Retrieved September 10, 2024.
  37. ^ Feiner, Lauren (September 10, 2024). "Google dominates online ads, says antitrust trial witness, but publishers are feeling 'stuck'". The Verge. Retrieved September 11, 2024.
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  40. ^ Godoy, Joey (September 12, 2024). "Google knew publishers would dislike ad tech change that helped it profit". Reuters. Retrieved September 14, 2024.
  41. ^ Feiner, Lauren (September 13, 2024). "How Google altered a deal with publishers who couldn't say no". The Verge. Retrieved September 14, 2024.
  42. ^ Purloff, Catherine (September 13, 2024). "Header Bidding Was Decimated, Top Trade Desk Exec Testifies at Google Trial". Adweek. Retrieved September 14, 2024.
  43. ^ Nylen, Leah (September 13, 2024). "Even Facebook Couldn't Compete With Google, Ex-Ad Chief Says". Bloomberg. Retrieved September 15, 2024.
  44. ^ Tarinelli, Ryan; Macagnone, Michael (January 24, 2023). "Justice Department sues Google over digital advertising tech". Roll Call. Retrieved April 5, 2023.
  45. ^ Orth, Taylor (February 7, 2023). "Most Americans see a lack of competition among tech companies as a serious problem | YouGov". YouGov. Retrieved April 21, 2023.
  46. ^ Kruppa, Miles; Schechner, Sam; Michaels, Dave (January 24, 2023). "DOJ Sues Google, Seeking to Break Up Online Advertising Business". The Wall Street Journal. Retrieved March 31, 2023.
  47. ^ Morrison, Sara (January 24, 2023). "Google's bad year is getting worse". Vox. Retrieved April 4, 2023. The Chamber of Progress, a Google-funded Big Tech advocacy group, said in a statement that the case was "disconnected from economic reality" and that Google's digital ad market share (estimated to be about 29 percent in 2022, giving it the largest share of any one company) was "at an all-time low.
  48. ^ Mehra, Salil (March 9, 2023). "The DOJ's AdTech Suit Against Google Is Anything but Unconventional". ProMarket. Retrieved April 5, 2023.
  49. ^ "Opinion | Why this Google antitrust lawsuit has promise". Washington Post. February 11, 2023. Retrieved April 4, 2023.
  50. ^ Feiner, Lauren (January 27, 2023). "The DOJ's antitrust case against Google is ambitious but risky". CNBC. Retrieved April 5, 2023.
  51. ^ First, Harry (February 23, 2023). "Why "The Jury's Out" on the Government's Case Against Google's Ad Tech Monopoly". ProMarket. Retrieved April 5, 2023.
  52. ^ Feiner, Lauren (October 20, 2020). "Google sued by DOJ in antitrust case over search dominance". CNBC. Retrieved May 30, 2022.
  53. ^ Lomas, Natasha (September 13, 2022). "Google's adtech practices targeted in UK, EU antitrust damages suits". TechCrunch. Retrieved March 31, 2023.
  54. ^ Weinstein, Samuel (April 26, 2023). "Understanding the DOJ's Decision To Seek a Jury Trial in the Google Ad Tech Case". ProMarket. Retrieved April 28, 2024.
  55. ^ Scarcella, Mike (October 4, 2023). "Google loses bid to keep Texas' ad tech lawsuit in New York". Reuters. Retrieved April 28, 2024.
  56. ^ Marfin, Catherine (April 24, 2024). "DOJ Wants To Weigh In On Texas Google Ad Tech Discovery". Law360. Retrieved April 28, 2024. The U.S. Department of Justice asked a federal judge Wednesday for permission to file a statement of interest in a Texas-led lawsuit accusing Google of anticompetitive conduct in the display advertising market, writing that the states' request for certain discovery items may violate an order in a substantially similar suit the DOJ is pursuing in Virginia.
  57. ^ Arcieri, Katie (January 3, 2024). "Google Ad Tech Antitrust Case Set for Texas Trial in March 2025". Bloomberg Law. Retrieved April 28, 2024.
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