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DOJ Says Google’s 36% Ad Revenue Stifles Competition — Tech Giant Says 31% and Falling

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James Morales
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Key Takeaways

  • A trial to determine whether Google’s AdTech dominance constitutes an illegal monopoly heard closing arguments on Monday, Nov. 25.
  • The Department of Justice argued that Google’s dominance in the space creates a bad deal for consumers.
  • However, Google contested the DOJ’s numbers.

During closing arguments  in a trial to determine whether Google’s advertising technology (AdTech) constitutes an illegal monopoly, the Department of Justice (DOJ) alleged that the company charges excessive rates to facilitate ad purchases.

According to the DOJ, the firm’s “take rate” is 36% when it controls the entire AdTech chain. But Google contends that it only takes 31% of online advertising fees.

Google AdTech Allegations

In January 2023, the DOJ and eight states filed  a civil antitrust lawsuit against Google LLC, alleging that the company unlawfully monopolized the AdTech market.

The DOJ contends that over the past 15 years, Google has engaged in anticompetitive and exclusionary conduct across digital advertising markets to force more publishers and advertisers to use its products and thwart their ability to use competing ones.

To prove the existence of a monopoly, the DOJ must demonstrate that Google controls a significant portion of a well-defined market. Perspective when framing the market is therefore crucial, as is demonstrating the proportion of Google’s dominance.

Numbers Make the Difference

Only a handful of the largest corporations have been declared illegal monopolies in the over 130 years since the Sherman Antitrust Act  was passed.

While the Act does not set a specific threshold for market control, courts have historically set a high bar, declining to rule against firms with less than 70% market share.

The DOJ argues that Google controls 91% of the market for publisher ad servers when focusing on open-web display advertising.

However, the defense has countered that when looking at the broader ecosystem of online advertising, including social media and streaming, Google’s market share is as low as 10%.

Another detail the two sides have clashed over is the extent to which Google profits by controlling the entire lifecycle of digital advertising.

Because Google’s technology operates on both the buy and sell sides of the equation, the DOJ claims the company takes 36% of all fees paid, leading to a bad deal for both website owners and advertisers.

For its part, Google says it offers some of the best rates on the market and only takes a 31% cut, a number it claims is declining.

The issue of fees is paramount. At its heart, the Sherman Act is designed to ensure fair competition and keep prices low. If the DOJ can prove that Google’s dominance in the market drives up costs for users, it will help demonstrate the existence of a monopoly.

Surrounded by Antitrust Disputes

Although Google has battled antitrust litigation for most of its existence, two DOJ monopoly cases currently threaten its very existence.

In a parallel case relating to its search engine, a jury found earlier this year that Google constituted an illegal monopoly. Following that outcome, the DOJ wants Google to spin off Chrome and potentially divest from Android to prevent further abuses.

As the AdTech case unfolds, prosecutors may push for a similar breakup order if they win, forcing Google to divest from one or more of its advertising platforms.

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James Morales

Although his background is in crypto and FinTech news, these days, James likes to roam across CCN’s editorial breadth, focusing mostly on digital technology. Having always been fascinated by the latest innovations, he uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
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