By Jody Godoy
ALEXANDRIA, Va. (Reuters) -Alphabet’s Google tried to dominate all sides of online advertising technology by controlling competitors and customers, a Justice Department prosecutor said as trial began in the tech titan’s latest antitrust battle in Alexandria, Virginia on Monday .
Prosecutors say Google has largely dominated the technological infrastructure that funds the flow of news and information on websites through more than 150,000 online ad sales per second.
Google used classic monopoly-building tactics to eliminate competitors through acquisitions, lock in customers to use its products and control how transactions took place in the online advertising market, said Julia Tarver Wood, a lawyer in the department’s antitrust division of Justice, in an opening statement.
“Google is not here because they are big, they are here because they have used that size to crush the competition,” she said.
U.S. District Judge Leonie Brinkema is hearing the case without a jury and will issue a ruling after the multi-week trial ends.
The Justice Department and a coalition of states based their case on “ancient history from a time when Google was still working to enable its tools to connect with competitors,” said Google’s lead attorney Karen Dunn.
Google’s tools are now interoperable with its rivals, and the company faces competition from tech companies including Amazon.com Inc (NASDAQ:) and Comcast (NASDAQ:) as digital ad spending shifts to apps and streaming video , she said.
The case is “like a time capsule: if you crack it open, you’ll find a BlackBerry (NYSE:), an iPod and a Blockbuster video card,” she said.
Dunn compared the allegations to claims Google rejected in the recent search monopoly case.
Dunn left the courtroom after making the opening statement. She is preparing Vice President Kamala Harris for a televised debate with former President Donald Trump on Tuesday.
During the trial, plaintiffs will try to show that Google used dominant positions in technology for publishers and advertisers to prevent them from using other tools and undermining bids placed through competitors’ products.
Tim Wolfe, an advertising executive at Gannett, testified Monday that the company has been using Google’s ad server for 13 years and that there are no other realistic options.
If Brinkema finds that Google broke the law, she would later consider prosecutors’ request to at least let Google sell Google Ad Manager, a platform that includes the Google publisher ad server and its ad exchange.
Shares of Alphabet (NASDAQ:) fell 1.7% in the afternoon.
Google’s ad tech tools accounted for $20 billion, or 11% of the company’s gross revenue in 2020, and about $1 billion, or 2.6%, of operating profit that year, according to research from stock analyst Wedbush.
According to Wedbush research and analysis of court documents, Ad Manager represented 4.1% of revenue and 1.5% of operating profit in 2020.
More recent figures are taken from court documents.
The case is one of several disputed alleged Big Tech monopolies.
The Justice Department last month won a ruling against Google in another case over its dominance in online search, and is separately suing Apple (NASDAQ:). The US Federal Trade Commission is investigating cases against Facebook parent company Meta Platforms (NASDAQ:) and Amazon.
