Google faces minimal financial risk in ad tech monopoly case

Experts say trial won’t hurt revenues.

Britain’s CMA is investigating Google parent Alphabet’s partnership with AI startup Anthropic, focusing on potential competition concerns.

As Google‘s trial on allegations of monopolising the advertising technology market draws to a close, experts believe the financial risk to the tech giant is minimal. The US Department of Justice (DOJ) and a coalition of states accuse Google of illegally controlling the markets used by advertisers and publishers to buy and sell online ads. However, analysts point out that the ad tech business at the centre of the trial, Google Network, is declining and represents a smaller portion of the company’s overall revenue compared to its dominant search business.

In 2023, advertising made up over 75% of Google’s $307.4 billion revenue, though the Network division, which is central to the DOJ case, contributed just $31.4 billion. The DOJ is pushing for the divestiture of Google Ad Manager, but analysts believe that even if Google loses, the financial impact would be small, with revenue losses potentially under 10%. Google has defended itself by highlighting strong competition from other platforms, especially in mobile apps and streaming ads, which could undermine the DOJ’s argument.

The more significant worry for Google lies in the potential consequences of a ruling in favour of the DOJ, as it could facilitate easier transitions for advertisers and publishers between platforms. A successful case might establish a legal precedent that holds tech companies accountable for monopolistic practices. However, the overall impact will hinge on the trial’s outcome and the remedies the court proposes in the upcoming months.