Google seeks to block forced breakup as landmark antitrust trial opens

Says it has already made reforms to its ad manager system

Alphabet Inc.'s Google returned to court Monday to defend its advertising empire against a dismantling effort by US antitrust officials, as a high-stakes trial began over the future of the company's digital ad business.

The trial opened in a federal courtroom in Alexandria, Virginia, after US district judge Leonie Brinkema declared in April that parts of Google's advertising technology stack functioned as an illegal monopoly.

The new trial will determine what remedies the court will impose, and whether Google will be forced to divest core parts of the system that powers its $305 billion-a-year advertising business.

At the centre of the dispute is Google's ad exchange, AdX, where online publishers sell ad space through automated auctions that take place in milliseconds as users load websites.

Google charges publishers about a 20% fee for each transaction. The US Department of Justice (DOJ) argues that Google manipulates these auctions to favour its own products and extract unfair profits, while shutting out competitors.

"The purpose of a remedy is doing what is necessary to restore competition," Julia Tarver Wood, an attorney with the DOJ's antitrust division, said in her opening statement.

She accused Google of designing algorithms to conceal anticompetitive practices.

"The means to cheat are buried in computer codes and algorithms."

Government lawyers are asking Brinkema to order Google to sell AdX and to require that the code governing how auctions are decided be made open source. They say structural changes are the only way to prevent Google from using its entrenched position to stifle innovation and competition.

Google's legal team sharply disputed that view, warning that such a breakup would destabilise the internet's economic backbone.

"The DOJ would reserve to itself broad and unparalleled power, control and leverage over a major American technology platform," attorney Karen Dunn argued.

She called the government's proposals "radical and reckless," contending they would harm rather than enhance competition by eliminating a key player in the ad market.

The company has asked Brinkema to adopt the more restrained approach taken by a Washington, D.C., judge who recently rejected most remedies the DOJ sought in a separate monopoly case over Google's dominance in search.

But the Justice Department says the two cases differ fundamentally. While the search case centred on distribution agreements, the ad tech case involves the infrastructure of the market itself.

No matter how Brinkema rules, Google has signalled it will appeal her earlier finding that its ad tech business is an unlawful monopoly. Appeals cannot be filed until remedies are finalised.

The stakes are enormous for Google and the wider digital economy. Ad revenue remains the lifeblood of Google's services division, supporting not only the company's operations but also the websites that rely on its display advertising network.

Google insists it has already made reforms to its ad manager system, including adding transparency and pricing options, to address concerns about competition.

It has also floated alternatives short of divestiture, such as policy changes that would make it easier for publishers to use rival platforms. The Justice Department says those measures are insufficient.

Google also argues that the rapid rise of AI has already altered the ad industry, pointing to new AI-driven ad tools from rivals such as Meta and Perplexity as evidence that the market remains dynamic.

Google's lawyers suggested that the government is attempting to reshape an industry that has already undergone transformation.