Zinger Key Points
- In 2008, a Google executive boasted the company’s ability to exclude competitors and lock in publishers to its digital ad platform.
- Regulators are probing the company’s intention of creating a monopoly around its ad business.
New evidence has come to light in Alphabet Inc Class A's GOOGL second antitrust trial in the U.S.
The company, which owns Google, is again being called to the stand on monopoly charges. This time, it’s over its ad revenue business.
“We’ll be able to crush the other networks and that’s our goal,” said a former Google executive in charge of the company's digital ad arm, according to evidence presented by prosecutors, Reuters reported.
The U.S. Department of Justice (DOJ) is likely preparing a bid to break up the company, with Google Chrome and Android the most likely units for divestment.
Prosecutors argue that Google Ad Manager, a platform that has become ubiquitous for online companies looking to display ads on their sites, has become a monopoly.
The trial began this week. The Department of Justice is accusing Alphabet of abusing control of its ad technology and thus violating antitrust law.
New evidence aims to characterize the company's intention to dominate the market when developing its Ad Manager platform.
Google Ad Manager was developed after Google purchased DoubleClick in 2008, an advertisement company that developed and provided internet ad serving services from.
David Rosenblatt was part of DoubleClick and became Google’s president of display advertising after the acquisition.
“We’re both Goldman and NYSE,” said Rosenblatt of the company's ad service in 2008, referring to its advantageous position which allowed it to dominate the online ad market by providing both the infrastructure, as well as the bid/ask prices in ad auctions, as market makers do in stock exchanges.
“Google has created what’s comparable to the NYSE or London Stock Exchange; in other words, we’ll do to display what Google did to search,” Rosenblatt said, according to DoJ notes.
Rosenblatt made mention of Google's ability to have a “first look” at available spots for ads by owning publisher ad servers as well.
The former executive emphasized the company's grip on publishers once they became part of its ad manager service, saying it would be a “nightmare” for them to switch platforms and that “it takes an act of God to do it.”
What Does It Mean For Google?
Rosenblatt's words fit like a glove to the DoJ's accusations, as it tries to put forth the case that Google intentionally tried to dominate the digital ad market.
For Google, the results have been superb. The company now controls 87% of market share for digital ads, the New York Times reports, which allows it to set the price of commissions over ad sales, the DoJ argues.
Yet the company might argue that aiming to dominate a market is what executives like Rosenblatt are hired to do.
Google's defense could say that Rosenblatt's remarks are not evidence of an intention to build a monopoly, but rather show a business executive performing their duties in a free market economy.
Earlier this week, Republican Senator Rand Paul criticized the DOJ for "abusing" the reach of its antitrust policies.
"We are going to penalize them for trying to be a good business? That's insane. And the government should have no role in preventing people from trying to increase their business," said Paul.
Judge Leonie Brinkema is presiding over the trial. The debate centers on the role the government should take in either incentivizing or blocking successful businesses that reach a high market share in any particular domain.
Google's Losing Streak: Google has been the only Big Tech company to be brought to trial over antitrust issues since Microsoft Corp's MSFT antitrust lawsuit two decades ago.
Meta Platforms Inc META, Amazon.com Inc AMZN and Apple Inc AAPL have also been sued by either the Federal Trade Commission or the DOJ over antitrust issues in recent years, but haven't reached trial yet.
Last month, a federal judge ruled that Google's dominance over the search engine market constitutes a monopoly.
Judge Amit P. Mehta ruled in favor of the DOJ, finding that paying smartphone companies like Apple or Samsung Electronics Co., Ltd. to feature Google as the default search engine in their devices contributed to Google's success in owning a 90% share of the search market.
This has been deemed to go against antitrust law, as Google paid over $26 billion over the years to these and other smartphone companies.
Mehta said last week it'll take until August 2025 to issue remedies for the company, the NY Times reported.
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