Google, DOJ try to define the digital ad market in antitrust trial

After the Department of Justice (DOJ) kicked off its argument that Alphabet (GOOG, GOOGL) holds an illegal monopoly over the online advertising market, Yahoo Finance legal reporter Alexis Keenan joined Julie Hyman and Josh Lipton on Market Domination to outline what happened the first day in court.

The antitrust case is "about online advertising, but if you ask the DOJ and you ask Google, 'What is this market?' they don't agree at all," Keenan said. The DOJ argued that the ad tech market comprises a group of niche markets. It called executives from publishing, advertising, and exchange companies as witnesses to bolster its claims that the ad tech market is made up of niche subsections.

On the other hand, Google says that all online advertising, including streaming, social media, and others, is one big market. This argument could allow Google to name Meta Platforms (META), Amazon (AMZN), and Microsoft (MSFT), among other big tech companies, as competitors in the space, making it easier to say there is competition within the space.

"It's going to be a tough argument for Google," Keenan said, noting that "the bottom line here is harm to consumers; that's what the judge cares about."

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Naomi Buchanan.

Transcripción del vídeo

Doj wants to break apart Google's online advertising businesses here.

Breaking it all down with us is Yahoo Finance senior legal reporter Alexis Keenan break it down.

Alexis.

Yeah.

So I was in court yesterday.

So day one of the second antitrust trial against Google in the past year and it's about online advertising.

But if you ask the doj and you ask Google, what is this market?

They don't agree at all.

So the DOJ say, well, this is a group of niche markets.

It's a big market, it has all these counterparts.

You have the publisher side, the adverser side side and then the exchange in between Google would say, no, not at all.

All of online advertising is one big market, 12 sided market where these parties operate.

And that should include display, social streaming advertising.

And who does that pull in?

That pulls in pretty much everybody.

You've got Microsoft Meta Amazon even Yahoo right that operate in this territory.

So Google wants them all in why?

Because it makes their argument easier because then they can say, look, we have all this competition in this market.

So the doj for its part saying no these ad tech markets exist.

And what they did is they put up four different executives on the stand, three of them founders and CEO S of companies that operate in these more niche areas.

One on the publisher side, one on the advertiser side and one on the exchange side.

And they all said they view these markets as distinct.

And so that bolstered the DOJ S argument.

Now, they're the ones who get to put on their case first, the government does.

So we haven't heard from Google yet, but for their opening statement.

Uh So Google though would say, look, the cost per click has run down publishing ad revenue is up.

This is a 24 to 30 some billion dollar a year industry that's pulling in money for publishers.

Uh So it's gonna be a tough argument once the once Google gets up and makes that argument because the bottom line here is harm to consumers.

That's what the, that's what the judge is gonna care about, are consumers being harmed in all this?

And if not, no problem when you talk to various legal gurus Alexis, legal experts and bottom line, you asked them, how strong is the government's case?

What do they tell you?

Like strong, weak, confusing, I confusing for sure.

Uh the top top uh comment, but I would say I have comments on both sides where some antitrust experts think this is a really strong case because they say if Google is able to tie together all of these market.

It's in which it operates, that it can inflate prices even if that's a penny, even if that's half a penny that they can do that and customers have nowhere else to go.

That's the argument is that there's a tying argument here a little bit complicated.

On the other hand, if consumers aren't harmed, if, if Google can make that argument that this is for the benefit of everyone involved, then the judge is going to have to defer to that and say that's a win.