Enlarge / A staffer with the Paul, Weiss legal firm wheels boxes of legal documents into the Albert V. Bryan US Courthouse at the start of a Department of Justice antitrust trial against Google over its advertiing business in Alexandria, Virginia, on September 9, 2024. Google faces its second major antitrust trial in less than a year, with the US government accusing the tech giant of dominating online advertising and stifling competition.
Just a couple of days into the Google ad tech antitrust trial, it seems clear that the heart of the US Department of Justice's case is proving that Google Ad Manager is the key to the tech giant's alleged monopoly.
Google Ad Manager is the buy-and-sell side ad tech platform launched following Google's acquisition of DoubleClick and AdX in 2008 for $3 billion. It is currently used to connect Google's publisher ad servers with its ad exchanges, tying the two together in a way that allegedly locks the majority of publishers into paying higher fees on the publisher side because they can't afford to drop Google's ad exchange.
The DOJ has argued that Google Ad Manager "serves 90 percent of publishers that use the ad tech tools to sell their online ad inventory," AdAge reported, and through it, Google clearly wields monopoly powers.
In her opening statement, DOJ attorney Julia Tarver Wood argued that acquisitions helped Google manipulate the rules of ad auctions to maximize profits while making it harder for rivals to enter and compete in the markets Google allegedly monopolized. The DOJ has argued those alleged monopolies are in markets "for publisher ad servers, advertiser ad networks, and the ad exchanges that connect the two," Reuters reported.
Google has denied this characterization of its ad tech dominance, calling the DOJ's market definitions too narrow. The tech company also pointed out that the Federal Trade Commission (FTC) investigated and unconditionally approved the DoubleClick merger in 2007, amidst what the FTC described as urgent "high profile public discussions of the competitive merits of the transaction, in which numerous (sometimes conflicting) theories of competitive harm were proposed." At that time, the FTC concluded that the acquisition "was unlikely to reduce competition in any relevant antitrust market."
But in its complaint, the DOJ argued that the DoubleClick "acquisition vaulted Google into a commanding position over the tools publishers use to sell advertising opportunities, complementing Google’s existing tool for advertisers, Google Ads, and set the stage for Google’s later exclusionary conduct across the ad tech industry."
To set things right, at the very least, the DOJ has asked the court to order Google to spin off Google Ad Manager, which may or may not include valuable products like Google's Display and Video 360 (DV360) platform. There is also the possibility that the US district judge, Leonie Brinkema, could order Google to sell off its ad tech business entirely.
One problem with those proposed remedies, analysts told AdAge, is that no one knows how big Google's ad tech business really is or the actual value of Google Ad Manager.
Google Ad Manager could be worth less if Google's DV360 platform isn't included in the sale or if selling either the publisher or advertiser side cuts out data allowing Google to set the prices that it wants. The CEO of an ad platform called Permutive, Joe Root, told AdAge that "it is hard to say how much of the value of Google’s ads business is because it has this advertiser product and DV360, versus how much of its value comes from Google Ad Manager alone."
Root doubts that Google Ad Manager is "on its own that valuable." However, based on "newly released documents for the trial," some analysts predict that "any new entity spun out of Google" would be "almost too big for any buyer," AdAge reported.
One estimate from an ad tech consultant who helms a strategic advisory firm called Luma Partners, Terence Kawaja, suggested that Google's ad tech business as a standalone company "could be worth up to $95 billion" today, AdAge reported.
“You can’t divest $100 billion,” Kawaja said. “There is no buyer for it. [Google] would have to spin it off to shareholders, that’s how any forced remedy would manifest.”