Google advertisements are commonplace. They are currently being brought before a judge as well.
According to Google's annual reports, its Networks division, including AdSense and Ad Manager, has seen revenue stagnate from $31.7 billion in 2021 to $31.3 billion in 2023.
Alphabet's Google is set to face another antitrust trial starting Monday in Virginia, which could potentially lead to significant changes in its business operations, particularly concerning its advertising technology.
The U.S. Justice Department, along with a coalition of states, alleges that Google has monopolized the advertising technology market that connects online publishers with advertisers.
The government argues that Google's dominance in both buying and selling sides of the ad transactions allows it to retain up to 36 cents on every dollar it brokers between publishers and advertisers.
If U.S. District Judge Leonie Brinkema rules that Google has violated antitrust laws, she will then consider whether to require the company to divest assets, including Google Ad Manager, a platform encompassing Google's publisher ad server and ad exchange.
Research by stock analyst Wedbush shows that Google's ad tech tools contributed $20 billion, or 11 percent, to the company's gross revenue in 2020, and approximately $1 billion, or 2.6 percent, to its operating profit that year.
Specifically, Ad Manager accounted for 4.1 percent of revenue and 1.5 percent of operating profit in 2020, with more recent figures redacted from court documents.
Google counters that the government's case is based on outdated internet practices, where desktop computers and precise URL entries dominated.
Today, advertisers are more likely to use social media platforms like TikTok or streaming services like Peacock to reach their audiences.
According to Google's annual reports, its Networks division, including AdSense and Ad Manager, has seen revenue stagnate from $31.7 billion in 2021 to $31.3 billion in 2023.
The Virginia trial follows a recent setback for Google in a separate case concerning its search engine, which is central to the company's $307 billion annual revenue.
A federal judge in Washington, D.C., ruled that Google's search engine is a monopoly, partly due to the substantial payments Google makes to companies like Apple to be the default search engine on devices.
Remedies for this case have yet to be determined.
Peter Cohan, a management practice professor at Babson College, suggests that the Virginia case might be more damaging for Google, as it could lead to divestitures of significant parts of its ad tech business.
The Virginia trial is expected to feature testimonies from executives of major newspaper publishers such as The New York Times Co. and Gannett, as well as online news sites that have reportedly suffered due to Google's practices.
Government lawyers argue that Google's high fees have harmed publishers, forcing them to either increase ads, put content behind paywalls, or shut down.
Google disputes these claims, arguing that its fees are not excessive compared to competitors and that its integrated technology improves ad and page loading speed while enhancing security.
The company also highlights that customers have alternatives, including working with outside ad exchanges.
Google asserts that the case unfairly focuses on outdated ad formats and does not account for the shift to mobile apps and social media advertising.
The government's case, according to Google's lawyers, "focuses on a limited type of advertising viewed on a narrow subset of websites when user attention migrated elsewhere years ago."
They argue that the last year users spent more time on the "open web" as opposed to social media, videos, or apps was 2012.
The trial, set to take place in Alexandria, Virginia, is anticipated to last several weeks.
In parallel, investigations into Google's dominance in ad technology continue in both the European Union and Britain.