This week, the trial of the Justice Department’s misguided antitrust lawsuit against Google’s digital advertising business (ad tech) starts. Like other antitrust cases that have gone to court in the last couple of years, this case is deeply flawed in several ways. Fundamentally, the DOJ’s arguments defy economic logic, ignore the realities of competition, and seek to put large competitors over small businesses and consumers.  

Here’s what you need to know:

The DOJ artificially excludes many ad tech competitors from the market.

The DOJ excludes major competitors and large swaths of the digital advertising space. As Vidushi Dyall of the Chamber of Progress explains, the DOJ’s market definition has two main components: “graphical web ads (as opposed to search ads, video ads, and mobile app ads) and the open web (rather than websites such as Facebook that use their own tools to sell directly to advertisers).”

— A quick analysis reveals that this definition ignores economic reality: graphic and web advertising can’t be separated from the rest of digital advertising. Under this definition, an ad on a website is part of the ad tech market, but an identical ad on the app version of that website is not. Exclusions like these are inconsistent with how the ad tech market works. In a 2022 analysis of the ad tech industry, Geoff Manne of the International Center for Law and Economics found that “open-display and in-app ads compete with search ads, while digital ads compete with offline advertising. Thus, courts and regulators should be skeptical of overly narrow market definitions focused on only small slices of a much larger relevant market for advertising.”

— Additionally, the DOJ’s definition focuses on a part of digital advertising that isn’t a major portion of the market anymore. Advertising analyst Eric Seufert argued earlier this year that the kinds of categories the DOJ uses are completely out of date. Google’s traditional ad tech business, he writes, is “an artifact from an earlier era of the internet in which consumer engagement was primarily captured in the open, desktop web. That’s no longer the case: eMarketer estimates that US consumers spend 88% of mobile internet engagement time in apps.”

In short, an antitrust analysis requires a market definition to be based on facts, and the DOJ’s definition fails this test. 

The DOJ’s case would harm advertisers and small businesses that benefit from ad tech, two groups an antitrust analysis must consider. 

The DOJ’s goal, to stop Google’s offering of integrated advertising tools, will clearly hurt advertisers and small businesses. Currently, advertisers rely on Google’s low-cost advertising tools to grow their reach and build their business. As we’ve previously written, advertisers especially value the flexibility ad tech provides. Google’s technology helps smaller businesses that cannot easily compete with large advertisers, who can spend far more on traditional advertising. Now, the DOJ wants to make easy-to-use, efficient technology less accessible to those small enterprises.

— Accordingly, small businesses are lining up against the DOJ in this upcoming trial. The DOJ’s witnesses are primarily Google’s ad tech competitors. By comparison, Google includes many advertisers that use its technology among its witnesses. Google’s approach, unlike the DOJ’s, actually reflects the dynamics of the ad tech market. As Geoff Manne writes, ad tech is about “the competing demands of advertisers, publishers, and consumers,” all groups that the DOJ does not consider.

The DOJ’s argument is fundamentally inconsistent with long-standing antitrust law.

The DOJ’s case focuses almost entirely on giving competitors access to Google’s ad tech platform. Courts have long said that antitrust law does not allow actions on this basis, which is known as the “duty to deal.” As Boston College Law School professor Daniel Lyons previously commented, requiring a company to reduce its product quality to protect rivals does not follow antitrust precedent. “Antitrust does not require… one to reduce product quality to protect rivals. Both results would benefit trailing competitors at the expense of consumers.”

— The recent Google Search decision affirms this very point. In his opinion, Judge Amit Mehta wrote that Google has “no obligation to provide [its] rivals with a ‘sufficient’ level of service.” 

— Furthermore, forcing Google to deal with its competitors risks consumers’ privacy. As Daniel Luque wrote at the DisCo project, forcing Google to deal with competitors means that “the DOJ would potentially risk consumers’ data privacy as that data would spread to services with differing degrees of data security.”

As Dyall concludes, “The Department of Justice’s upcoming trial against Google is less about ad tech and more about altering antitrust laws to force companies to provide competitors with access to their technology.” This aim is completely inconsistent with what an antitrust action should be, and the court should therefore unequivocally reject the DOJ’s case.