Week one of DOJ v Google ongoing. Despite the heat in the courtroom, let’s look back a little: here’s a recap of the Department of Justice (DOJ)’s arguments against the Google’s alleged ad market monopoly.

Justice Department Sues Google for Monopolizing Digital Advertising Technologies

PRESS RELEASE of DOJ. Tuesday, January 24, 2023

The lawsuit is focused on Google’s display advertisement business—the two-sided market of advertisers, publishers and intermediate service providers.

Filed in the U.S. District Court for the Eastern District of Virginia, the complaint alleges that Google monopolizes key digital advertising technologies, collectively referred to as the “ad tech stack,” that website publishers depend on to sell ads and that advertisers rely on to buy ads and reach potential customers.

Google introduced Google Ad Manager in 2018 (see the release blog) that merged both its supply and demand-side business into one single platform:

  • Supply side: so-called ‘Supply[Sell]-Side Platform (SSP)’ or Ad Servers that provide publishers monetizing tool of their views.
  • Demand-Side Platform: often referred to as DoubleClick Ad Exchange (AdX). It sells display ads to advertisers.

Note: Google now has three major ad products: (i) the lucrative Google AdWords that sells Google’s own ad inventory (e.g. Search, YouTube, Google Maps); (ii) Google Marketing Platform (e.g. Google Analytics 360 Suite, Display & Video 360, DoubleClick Bid Manager etc.). They are mostly subscription-based analytical tools. And finally, (iii) Google Ad Manager, the problematic kid that DOJ is complaining against. See Google’s 2018 release blog here for details.

Focusing on display advertising and Google Ad Manager, the current market according to DOJ, looks like

Google now controls the digital tool that nearly every major website publisher uses to sell ads on their websites (publisher ad server); it controls the dominant advertiser tool that helps millions of large and small advertisers buy ad inventory (advertiser ad network); and it controls the largest advertising exchange (ad exchange), a technology that runs real-time auctions to match buyers and sellers of online advertising.

Google now controls the digital tool that nearly every major website publisher uses to sell ads on their websites (publisher ad server); it controls the dominant advertiser tool that helps millions of large and small advertisers buy ad inventory (advertiser ad network); and it controls the largest advertising exchange (ad exchange), a technology that runs real-time auctions to match buyers and sellers of online advertising.

Google’s anticompetitive conduct has included, according to DOJ:

  • Acquiring Competitors: Engaging in a pattern of acquisitions to obtain control over key digital advertising tools used by website publishers to sell advertising space;
  • Forcing Adoption of Google’s Tools: Locking in website publishers to its newly-acquired tools by restricting its unique, must-have advertiser demand to its ad exchange, and in turn, conditioning effective real-time access to its ad exchange on the use of its publisher ad server;
  • Distorting Auction Competition: Limiting real-time bidding on publisher inventory to its ad exchange, and impeding rival ad exchanges’ ability to compete on the same terms as Google’s ad exchange; and
  • Auction Manipulation: Manipulating auction mechanics across several of its products to insulate Google from competition, deprive rivals of scale, and halt the rise of rival technologies.

The complaint filed by DOJ states that, according Google’s internal files, all of its intermediate service gets to keep about 35% of every dollar spent on digital advertising.

35% of ad spending goes to Google

35% of ad spending goes to Google

I mean, there’s still $65 left for the publishers, not entirely bad for a monopoly two-sided platform. Like come on, DOJ might want to take a look at some other monopoly two-sided platforms, like PinDuoDuo…

DIGIDAY: DOJ vs. Google: The arguments for and against the defendant’s (alleged) ad market monopoly. Sept. 9, 2024.

DOJ: Justice Department Sues Google for Monopolizing Digital Advertising Technologies. Tuesday, January 24, 2023

Google’s blogs: Introducing simpler brands and solutions for advertisers and publishers, Sridhar Ramaswamy (2018). Introducing Google Ad Manager. Jonathan Bellack (2018).

Publift: DoubleClick for Publishers: Everything You Need to Know. Brock Munro (2024).