Google faces a new antitrust trial after ruling declaring search engine a monopoly

ALEXANDRIA, Va. (AP) — One month after a judge declared Google's search engine an illegal monopoly, the tech giant faces another antitrust lawsuit that threatens to break up the company, this time over its advertising technology.

The Justice Department, joined by a coalition of states, and Google each made opening statements Monday to a federal judge in Alexandria, Virginia, who will decide whether Google holds a monopoly over online advertising technology.

The regulators contend that Google built, acquired and maintains a monopoly over the technology that matches online publishers to advertisers. Dominance over the software on both the buy side and the sell side of the transaction enables Google to keep as much as 36 cents on the dollar when it brokers sales between publishers and advertisers, the government contends.

They allege that Google also controls the ad exchange market, which matches the buy side to the sell side.

“One monopoly is bad enough. But a trifecta of monopolies is what we have here,” Justice Department lawyer Julia Tarver Wood said during her opening statement.

Google says the government's case is based on an internet of yesteryear, when desktop computers ruled and internet users carefully typed precise World Wide Web addresses into URL fields. Advertisers now are more likely to turn to social media companies like TikTok or streaming TV services like Peacock.

In her opening statement, Google lawyer Karen Dunn likened the government's case to a "time capsule with a Blackberry, an iPod and a Blockbuster video card.”

Dunn said Supreme Court precedents warn judges about “the serious risk of error or unintended consequences” when dealing with rapidly emerging technology and considering whether antitrust law requires intervention. She also warned that any action taken against Google won't benefit small businesses but will simply allow other tech behemoths like Amazon, Microsoft and TikTok to fill the void.

According to Google's annual reports, revenue has actually declined in recent years for Google Networks, the division of the Mountain View, California-based tech giant that includes such services as AdSense and Google Ad Manager that are at the heart of the case, from $31.7 billion in 2021 to $31.3 billion in 2023.

The case will now be decided by U.S. District Judge Leonie Brinkema, who is best known for high-profile terrorism trials including that of Sept. 11 defendant Zacarias Moussaoui. Brinkema, though, also has experience with highly technical civil trials, working in a courthouse that sees an outsize number of patent infringement cases.

The Virginia case comes on the heels of a major defeat for Google over its search engine. A judge in the District of Columbia declared the search engine a monopoly, maintained in part by tens of billions of dollars Google pays each year to companies like Apple to lock in Google as the default search engine presented to consumers when they buy iPhones and other gadgets.

And in December, a judge declared Google's Android app store a monopoly in a case brought by a private gaming company.

In the search engine case, the judge has not yet imposed any remedies. The government hasn't offered its proposed sanctions, though there could be close scrutiny over whether Google should be allowed to continue to make exclusivity deals that ensure its search engine is consumers' default option.

Peter Cohan, a professor of management practice at Babson College, said the Virginia case could potentially be more harmful to Google because the obvious remedy would be requiring it to sell off parts of its ad tech business that generate billions of dollars in annual revenue.

“Divestitures are definitely a possible remedy for this second case,” Cohan said “It could be potentially more significant than initially meets the eye.”

Google is also facing intensifying pressure over its ad tech business across the Atlantic. British competition regulators last week accused the company of abusing its dominance in the country’s digital ad market and giving preference to its own services. European Union antitrust enforcers carrying out their own investigation suggested last year that breaking up the company was the only way to satisfy competition concerns about its digital ad business

In the Virginia trial, the government's witnesses will include executives from newspaper publishers that the government contends have faced particular harm from Google's practices.

“Google extracted extraordinary fees at the expense of the website publishers who make the open internet vibrant and valuable,” government lawyers wrote in court papers.

The government's first witness was Tim Wolfe, an executive with Gannett Co., a newspaper chain that publishes USA Today as its flagship. Wolfe said Gannett feels like it has no choice but to continue to use Google's ad tech products, even thought the company keeps 20 cents on the dollar from every ad purchase, not even accounting for what it takes from the advertisers. He said Gannett simply can't give up access to the huge stable of advertisers that Google brings to the ad exchange.

On cross-examination, Wolfe acknowledged that despite Google's supposed monopoly, Gannett was able to work with other competitors to sell its available inventory to advertisers.

The government's case also attempts to use the words of Google's own employees against them. In openings, Justice Department lawyers cited an email sent by a Google employee wondering whether Google's control of the technology on all three sides presented “a deeper issue” to consider.

“The analogy would be if Goldman or Citibank owned the NYSE (New York Stock Exchange),” wrote the employee Jonathan Bellack.

Google asserts the integration of its technology on the buy side, sell side and in the middle assures ads and web pages load quickly and enhance security.

Google says the government's case is improperly focused on display ads and banner ads that load on web pages accessed through a desktop computer and fails to take into account consumers' migration to mobile apps and the boom in ads placed on social media sites over the last 15 years.

The government's case “focuses on a limited type of advertising viewed on a narrow subset of websites when user attention migrated elsewhere years ago,” Google's lawyers wrote in a pretrial filing.

The trial is expected to last several weeks.

AP Business Writer Kelvin Chan contributed to this report from London.

The U.S. District Court for the Eastern District of Virginia is seen Monday, Sept. 9, 2024, in Alexandria, Va. One month after a judge declared Google's search engine an illegal monopoly, the tech giant faces another antitrust lawsuit that threatens to break up the company, this time over its advertising technology. (AP Photo/Stephanie Scarbrough)

Lawyers and legal assistants leave the U.S. District Court for the Eastern District of Virginia for a lunch break in the Department of Justice's antitrust trial against tech giant Google, Monday, Sept. 9, 2024, in Alexandria, Va. (AP Photo/Stephanie Scarbrough)

Lawyers leave the U.S. District Court for the Eastern District of Virginia for a lunch break in the Department of Justice's antitrust trial against tech giant Google, Monday, Sept. 9, 2024, in Alexandria, Va. One month after a judge declared Google's search engine an illegal monopoly, the tech giant faces another antitrust lawsuit that threatens to break up the company, this time over its advertising technology. (AP Photo/Stephanie Scarbrough)

Eric Mahr, left, a lawyer representing Google in the Department of Justice's antitrust case against the tech giant, returns to the U.S. District Court for the Eastern District of Virginia after a lunch break in the trial, Monday, Sept. 9, 2024, in Alexandria, Va. (AP Photo/Stephanie Scarbrough)

The U.S. District Court for the Eastern District of Virginia is seen Monday, Sept. 9, 2024, in Alexandria, Va. (AP Photo/Stephanie Scarbrough)

Eric Mahr, right, a lawyer representing Google in the Department of Justice's antitrust case against the tech giant, leaves the U.S. District Court for the Eastern District of Virginia for a lunch break in the trial, Monday, Sept. 9, 2024, in Alexandria, Va. (AP Photo/Stephanie Scarbrough)

Jeannie Rhee, a lawyer representing Google in the Department of Justice's antitrust case against the tech giant, leaves the U.S. District Court for the Eastern District of Virginia for a break in the trial, Monday, Sept. 9, 2024, in Alexandria, Va. (AP Photo/Stephanie Scarbrough)

FILE - A sign at Google headquarters in Mountain View, Calif. is shown on Oct. 8, 2010. (AP Photo/Paul Sakuma, File)

Google faces new antitrust trial after ruling declaring search engine a monopoly

Google faces new antitrust trial after ruling declaring search engine a monopoly

NEW YORK (AP) — Sean “Diddy" Combs faces federal charges in New York, his lawyer said late Monday.

Details of the charges weren't immediately announced by prosecutors, but Combs' lawyer, Marc Agnifilo, issued a statement saying: “We are disappointed with the decision to pursue what we believe is an unjust prosecution of Mr. Combs by the U.S. Attorney’s Office.”

He added that Combs had gone to New York last week in anticipation of the charges being brought.

“He is an imperfect person, but he is not a criminal,” Agnifilo said.

Criminal charges would be a major but not unexpected takedown of one of the most prominent producers and most famous names in the history of hip-hop.

The federal investigation of the 58-year-old Combs was revealed when Homeland Security Investigations agents served simultaneous search warrants and raided Combs' mansions in Los Angeles and Miami on March 25.

His defense attorney Aaron Dyer the day after the raids called them “a gross use of military-level force,” said the allegations were “meritless,” and said Combs was “innocent and will continue to fight" to clear his name.

Combs, then known as Puff Daddy, was at the center of the East Coast-West Coast hip-hop battles of the 1990s as the partner and producer of the Notorious B.I.G., who was shot and killed in 1997. But like many of those who survived the era, his public image had softened with age into a genteel host of parties in Hollywood and the Hamptons, a fashion-forward businessman, and a doting father who spoiled his kids, some of whom lost their mother in 2018.

But a different image began emerging in November, when his former protege and girlfriend, the R&B singer Cassie, became the first of several people to sue him for sexual abuse with stories of a steady stream of sex workers in drug-fueled settings where some of those involved were coerced or cajoled into sex.

In her November lawsuit, Cassie alleged years of abuse, including beatings and rape. Her suit also alleged Combs engaged in sex trafficking by “requiring her to engage in forced sexual acts in multiple jurisdictions” and by engaging in “harboring and transportation of Plaintiff for purposes of sex induced by force, fraud, or coercion.” It also said he compelled her to help him traffic male sex workers Combs would force Cassie to have sex with while he filmed.

The suit was settled settled the following day, but its reverberations would last far longer. Combs lost lingering allies, supporters and those reserving judgment when CNN in May aired a leaked video of him punching Cassie, kicking her and throwing her on the floor in a hotel hallway.

The following day, in his first real acknowledgement of wrongdoing since the stream of allegations began, Combs posted a social media video apologizing, saying “I was disgusted when I did it” and “I’m disgusted now.” Cassie’s lawsuit was followed by at least a half-dozen others in the ensuing months.

In February, a music producer filed a lawsuit alleging Combs coerced him to solicit prostitutes and pressured him to have sex with them.

Another of Combs’ accusers was a woman who said the rap producer raped her two decades ago when she was 17.

Another woman who filed a lawsuit, April Lampos, said she was a college student in 1994 when she met Combs and a series of “terrifying sexual encounters” with Combs and those around him began that lasted for years.

Combs and his attorneys denied nearly all of the lawsuits’ allegations.

While authorities did not publicly say that the lawsuits set off the criminal investigation, Dyer said when the warrants were served that the case was based on “meritless accusations made in civil lawsuits.”

The AP does not typically name people who say they have been sexually abused unless they come forward publicly as Cassie and Lampros did.

As the founder of Bad Boy Records, Combs became one of the most influential hip-hop producers and executives of the past three decades Along with the Notorious B.I.G. he worked with a slew of top-tier artists including Mary J. Blige, Usher, Lil Kim, Faith Evans and 112.

Combs’ roles in his businesses beyond music — including lucrative private-label spirits, a media company and the Sean John Fashion line — took major hits when the allegations arose.

The consequences were even greater when the leaked beating video emerged. Howard University cut ties with him, and he returned his key to the city of New York at the request of the mayor.

FILE - Sean "Diddy" Combs arrives at the LA Premiere of "The Four: Battle For Stardom" at the CBS Radford Studio Center on May 30, 2018, in Los Angeles. (Photo by Willy Sanjuan/Invision/AP, File)