Google’s ad empire under fire over claims it manipulates market

Google holds the top spot in the global digital ad market, which has grown to $676.9bn (€610.8bn), according to 2024 projections by research firm EMarketer. File Picture: Andrew Matthews/PA

Alphabet’s Google returned to court this week to face US Justice Department allegations that it manipulates the $677bn (€610.9bn) display advertising market, in violation of competition laws, a month after losing a landmark ruling that it illegally dominates online search.

The department and a coalition of eight states have accused Google of over the years acquiring the tools used to buy, sell, and serve ads on the internet, locking up the technology behind website ads, and harming publishers and advertisers.

The trial, which will take place in Alexandria, Virginia, marks the first case brought by the Biden administration against big tech firm to have its day in court.

The department’s earlier lawsuit accusing Google of illegally monopolising internet searches is the biggest competition case in tech since a ruling against Microsoft over two decades ago. It was filed in 2020 under former president Donald Trump.

Google has denied the department’s claims, asserting that its tools work seamlessly with products made by competitors and that the US government’s case is based on an outdated understanding of digital ad markets.

Google holds the top spot in the global digital ad market, which has grown to $676.9bn (€610.8bn), according to 2024 projections by research firm EMarketer.

Of Alphabet’s nearly $260bn (€234.6bn) in revenue last year, about $31.3bn (€28.2bn) came from the display advertising at issue in the case, according to the company’s most recent annual earnings report.

The department's competition lawyers say Google, using its position as a middleman that controls the market from end to end, drives up the price of ads while paying less to the websites that show them.

Due to its dominance of the technology, Google has the ability to force publishers and advertisers to use its suite of products, generating monopoly profits — Google keeps about $36 out of every $100 in advertising spent through its tools, according to the department lawsuit which was filed last year.

Websites show over 13bn display ads every day, bringing in roughly $12bn in revenue annually, according to the department.