After three weeks in federal court, two dozen witnesses and hundreds of exhibits, the bulk of the U.S. vs Google ad-tech antitrust trial has wrapped until closing arguments, which are expected in late November. There’s also another wild card still in play: How everything will be seen through the legal lens of the court.
Taking place in U.S. District Court for the Eastern District of Virginia, the trial presided by U.S. Judge Leonie Brinkema took just half as long as expected. However, it was still packed with plenty of high-profile testimony and moments of courtroom drama. Some industry insiders also felt a sense of vindication as evidence from the past decade came to light. One witness, Stephanie Layser, also wrote on LinkedIn that testifying even felt “cathartic.”
While there are likely lots of lessons to be learned from ad-tech’s month under the microscope, some hope the trial will help others feel more comfortable with sharing concerns without fear of reprisal and overall foster a more transparent ecosystem.
A look back at the DOJ’s case
The Justice Department alleges Google has a “trifecta of monopolies” across the publisher ad server market, the ad exchange market and the advertiser ad network market. According to the DOJ, these monopolies have allowed the giant to control not just the competition, but also to control customers and the rules while harming publishers, advertisers and rival ad tech companies.
Proving these charges requires first getting the court to agree that Google has a monopoly over the three markets in question and also proving Google illegally used its dominance to harm the groups in question. The DOJ has also brought a fourth claim that Google engaged in illegal behavior by tying its publisher ad server to its ad exchange product.
Publishers represented during the trial included current and former execs from Gannett, News Corp, The Daily Mail and Vox Media — with some answering questions about how they tried (and failed) to wean themselves off of Google. Meanwhile, other evidence came from emails and audio recordings where publishers expressed a range of frustrations with their inability to switch to alternatives or wrest away control from Google’s products.
Ad-tech testimony focused on the challenges of competing with Google, with execs representing major players from The Trade Desk, Magnite, Pubmatic, AppNexus and Equativ. While other experts included agency execs and economists, other witnesses came from Google itself, with both current and former execs called by both the DOJ and the defendant.
Google’s defense and the legal landscape
When weighing the evidence, the court will also consider other antitrust cases — both past and present. Legal experts note U.S. Judge Brinkema will likely study the recent ruling by U.S. Judge Amit Mehta in the Google search trial taking place in United States District Court for the District of Columbia.
Google hopes to bolster its defense with case law from the past, like the Supreme Court’s 2018 ruling in Ohio vs. American Express. While it ruled credit card holders and merchants weren’t two separate markets, Google wants the court to think of the ad-tech industry as a single market rather than publishers, advertisers and ad-tech companies each comprising their own ecosystem. However, some legal experts don’t think the Amex decision won’t necessarily apply to the Google case because the ad-tech ecosystem doesn’t have the same network effects as the credit card market.
Google has attempted to widen the market of open web display ads to include everything from social media and streaming audio to CTV. However, some legal experts think Brinkema might side with the DOJ and decide on a more narrow market definition. Most two-sided platforms also don’t have a single simultaneous transaction market, noted Roger Alford, an antitrust law professor at Notre Dame.
“I don’t think you would say that the relationship with publishers and publisher brokers is the same relationship between advertisers and advertiser brokers,” Alford, who authored a 2020 article about Ohio v. Amex, told Digiday. “The two-sided market argument was not bought by Judge Mehta [in the Google search trial] and I don’t think it’ll be bought by the judge in this case.”
Alford, who worked in the DOJ’s antitrust division from 2017-2019, also is consulting with the Texas in a separate antitrust case against Google brought by a group of state attorneys general. “This is really about the future of the free and open Internet,” he said. “If we’re not going to live in a world where we’re behind paywalls, then we have got to fix the business structure of the free internet.”
Google also hopes to lean on a 2004 decision in Verizon v. Trinko, which ruled a dominant player can choose not to deal with rivals even if antitrust law requires it — if larger business can make a legitimate business case for its actions. That could be a key factor in the DOJ claim that Google was unfair in how it worked or didn’t work with rivals. In the ad tech case, Google claims that it acted in the best interested of user privacy and ad quality. However, various witnesses during the trial testified that Google’s alternative to header bidding wasn’t necessarily more secure or higher quality than its rivals.
“The DOJ wants to force Google to build tools that would let other companies, who don’t have our standards for safety and security, market to our customers and use our technology,” Google wrote last week in a post-trial blog post. “And that’s despite the fact that we already go above and beyond legal requirements in making tools that others can use.”
The U.S. Supreme Court has become increasingly skeptical of antitrust intervention in recent decades, said William Kovacic, an antitrust law professor at George Washington University. Although the court was more receptive in the 1980s, key decisions from the 1990s seemed to raise the bar for plaintiffs. While past jurisprudence creates a “very demanding” climate for plaintiffs, he said some recent rulings by lower courts have favored plaintiffs in some cases — including in the previous Microsoft antitrust trial, as well as another recent Google search trial.
“It’s a difficult environment in which to build and succeed with cases, but it’s not impossible,” said Kovacic, a former chairman of the Federal Trade Commission. “There are enough instances in which plaintiffs have succeeded to provide a reasonable basis for the Justice Department to think that it too can prevail, and they’re off to a really good start in the [Google] search case.”
Search, AI and known unknowns
The ad-tech case is focused on open web display ads, but other parts of the internet were also on everyone’s minds. The Google search trial happening in parallel is scheduled to begin the remedies phase in March, which could mean any outcomes for one or both Google cases could happen in tandem.
Other questions address what the DOJ might ask for with its remedy requests in the search trial, and how that might be impacted by a potential outcome in the ad-tech case. Meanwhile, the DOJ and other federal agencies have expressed concern about how leading incumbent firms could develop and deploy AI models to their advantage if they’re not scrutinized and addressed now. In other words, how does the federal government learn from not acting enough or fast enough in the past?
“They realize there’s a fair amount of uncertainty in deciding what to do, but I think a guiding concept in their view is that they failed badly in the past by not intervening enough,” Kovacic said. “The enforcement agencies were too timid, and their timidity-entrenched positions of dominance are hard to undo.”