An advertising watchdog explains what’s at stake with Google’s latest DOJ case

As Google’s high-profile antitrust trial reaches the end of week three, the future of its gargantuan ad business is in flux. The director of intelligence at digital advertising watchdog Check My Ads, Arielle Garcia has been in every court session to cover the DOJ’s arguments and Google’s defense. As a veteran of the ad industry, she shares how the trial is poised not only to disrupt the digital ad landscape but also to affect democracy and journalism as we know it. This is an abridged transcript of an interview from Rapid Response, hosted by Bob Safian, former editor-in-chief of Fast Company. From the team behind the Masters of Scale podcast, Rapid Response features candid conversations with today’s top business leaders navigating real-time challenges. Subscribe to Rapid Response wherever you get your podcasts to ensure you never miss an episode. Earlier this year, a federal judge ruled that Google’s search business is an illegal monopoly. The penalty phase is still to come. Meanwhile, last week, Google successfully challenged a $1.7 billion fine from European regulators in the wake of losing a different challenge against a $2.7 billion EU fine. In the midst of all that, Google’s the target of another U.S. antitrust trial about its ad business. You’ve been in Virginia covering that trial. For those who aren’t ad industry insiders, can you explain what the allegations are and how we’ve come to this place? Yeah, so back in the old days, the way that ads were bought was that literally you’d have your agency team calling publishers and trying to buy ad space. Today, much of that is automated. And so what this trial is about is Google’s monopolization of the ad tech. What the DOJ is focused on, in particular, is they allege that Google has monopolized three separate markets within the ad tech industry. The first is publisher ad servers, which is what publishers use to manage their inventory. The second is advertiser ad networks, which are basically the advertisers’ buying tools, the ad exchange that connects the two. The last claim is that they tied their products together. Now, why does that matter? The business model of the internet is digital advertising. So by controlling these tools that are used to buy and sell ads, Google’s effectively controlling the business model of the internet. They have an outsize say in what content gets funded and what doesn’t, and as newsrooms are shuttering. A lot of that has to do, as the DOJ alleges, with Google’s conduct. I just want to make sure I understand. This is like Google is on all sides of these transactions, right? They are facilitating the buying on the part of advertisers. They are facilitating the placing of those ads, from advertisers to publishers. They’re running the marketplace in between. And in the process of doing that, the allegation is that they’re diverting that business to their own properties and, in some ways, devaluing other competition. We haven’t even gotten to the diverting to their own and operated in this trial, although that could be a whole different episode, but this is more about how they’re extracting money from all sides along the way. They’re taking over 30 cents of every ad dollar that’s spent. That is an overcharge, the brunt of which is predominantly borne by publishers. And that’s kind of what’s at the core of the trial. This is what’s driven their stock price up so much, a dominant business, which every business aspires to in certain ways, but it has gotten dominant to a point that it has negative implications for the industry. And that’s democracy, ultimately, right? I was surprised because I didn’t think that we would necessarily hear that argument explicitly in court, but there was a very short deposition read where one of the witnesses talked about how basically a healthy digital ad market is central to democracy because of the fact that it funds journalism. As you talk about the evidence at this trial, it sounds pretty damning and difficult for Google. One potential outcome could be the breakup of Google, which has been speculated about. How realistic is that? I believe that it’s realistic. So what the DOJ proposed is the sell-off of, at a minimum, the sell side of their ad tech business. So that’s the publisher ad server and like, so GAM, Google Ad Manager Suite, is inclusive of the ad server, and now the ad exchange, they tie them together. So at least that resolves in their mind the conflict of interest. I think if Google thinks that they can get the remedy to just be the spin-off of the sell-side business, that’s something that they’ve been dangling since at least 2022. They just recently offered it in response to, I think it was publisher litigation in Europe or the U.K. the other day. So they’ve been preparing for that. I do think that even they think that it’s quite likely that that could be an outcome. My hope is that it does not stop at just the sell side of the ad tech busine