Google launches defense with antitrust cases claiming monopoly on advertising technology

Google opened its defense against allegations that it held an illegal monopoly on online advertising technology on Friday, saying that witnesses’ testimony is far more complicated and competitive than depicted by the federal government.

“We’re a great fan of our efforts to help people understand how we’re doing,” said Scott Schaffer, vice president of Google’s Global Partnerships, the first witness in an antitrust trial in a federal court in Alexandria.

The Justice Department and the state coalition claims that Google has built and maintained an illegal monopoly over technology that encourages online advertising to be bought and sold by consumers.

Google counters that the government case is inappropriately focusing on narrow types of online ads, that is, rectangular ads that are essentially displayed on the right side of a web page. Google’s lawyers said in their opening statement that the Supreme Court warned the judges against taking action in dealing with new technologies rapidly, as explained by Sheffer for the risk of errors and unintended consequences.

By defining the market, Google says it narrowly ignores the competition it faces from social media companies, Amazon and streaming television providers, among others who provide a way to reach online consumers to advertisers.

Justice Department lawyers called for witnesses to testify for two weeks before taking a break from the lawsuit on Friday afternoon, detailing how automated ad exchanges auctioned on milliseconds issues and how much they cost.

The department claims that auctions are sensitive in a subtle way, in a way that benefits Google, in a way that benefits the elimination of competitors and prevents them from making as much money as possible to sell advertising space.

Also, when Google’s technology is used in every facet of an ad transaction, Google can maintain 36 cents in dollars for a particular ad purchase, billions of that can occur every day.

Executives at media companies such as Gannett, which publishes us today, and News Corp., which owns Wall Streel Journal and Fox News, say the technology Google uses to sell advertising space and the advertisers trying to buy it dominate the landscape. Products are tied together, so if you want to easily access advertisers’ large caches, publishers should use Google technology.

The government said in a complaint filed last year that at least Google should be forced to sell some of its business that caters to publishers in order to break its advantage.

In testimony on Friday, Sheffer explained how Google’s tools have evolved over the years, and how they were reviewed by publishers and advertisers to prevent issues such as malware and fraud.

The trial began on September 9th, just a month after a District of Columbia judge declared Google’s core business, the ubiquitous search engine, an illegal monopoly. That trial is still ongoing to determine the remedies the judge may impose.

Advertising technology, which we question in the Virginia case, does not generate the same kind of revenues for Google as search engines, but is thought to bring hundreds of billions of dollars a year.

Overseas, regulators have accused Google of anti-competitive conduct. However, the company won this week when the EU court overturned the 1.49 billion euro ($1.66 billion) antitrust finer five years ago, targeting different segments of the company’s online advertising business.

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