Google is in court this week looking to fend off a challenge to its US$240 billion a year advertising business.
Driving the news: The U.S. government’s case claims that Google has stifled competition in all three main sectors of the online advertising space. This includes tools for buying ads on websites, selling ad space, and the exchanges that connect buyers and sellers.
- Google argues there’s plenty of competition in the space and that the government is punishing it for creating effective tools that publishers and advertisers choose to use.
Catch-up: The trial comes just weeks after Google was handed one of the biggest court losses in its history in a separate antitrust case, with a U.S. court ruling that the other core part of its business — its search engine — gives the tech giant an illegal monopoly.
- To end that monopoly, the U.S. government is considering asking the judge on the case to force a break up of Google’s search division.
Why it matters: Search may have put Google on the map, but its ad business now makes up nearly 80% of its revenue. A loss in this case could force the company to unbundle its ad tools, dealing a major blow to what’s become the most integral part of its business.—LA