The antitrust trial has begun, and Google's advertising business faces the threat of being split up

According to media reports on Monday, Google is facing a new challenge from U.S. antitrust enforcement agencies, with the U.S. Department of Justice seeking the sale of its core online advertising business. The trial, which began on Monday in Alexandria, Virginia, will determine whether the tech giant needs to divest its advertising trading platform AdX.

The coalition formed by the U.S. Department of Justice and several states is demanding that Google sell its advertising trading platform AdX, which charges online publishers a 20% fee for advertising auctions conducted when users load websites. The government is also seeking to have Google open-source the source code for its ad bidding winning mechanism.

It is worth mentioning that presiding Judge Leonie Brinkema ruled in April that Google holds an illegal monopoly in the online advertising technology sector. After the trial concludes this week, she will decide what remedies to impose on the company.

This case is part of a bipartisan effort in the U.S. to crack down on large tech companies, which began during Trump's first presidential term, and there are still pending cases against Meta, Amazon, and Apple. The lawsuit against Google represents the government's next best opportunity to curb its monopolistic power after previous efforts to force the company to sell its Chrome browser failed.

Government Seeks to Split Core Advertising Business

The core demand of the U.S. Department of Justice is to force Google to sell the AdX advertising trading platform, which is a crucial component of Google's advertising business, conducting real-time ad auctions when users visit websites and charging publishers a 20% service fee.

The government is also requesting that Google open-source its auction algorithm to increase transparency and promote competition. These demands stem from a previous ruling by the judge that Google illegally locked publishers into using its services by bundling its publisher ad server with the AdX platform.

Last year, the Department of Justice persuaded Judge Brinkema that Google illegally bundled its publisher ad server (the platform used by websites to store and manage digital ad inventory) with the AdX platform, forcing publishers to use its services.

Google Proposes Policy Adjustment Alternative

In the face of the threat of divestiture, Google has proposed an alternative solution. The company suggests changing its policies to make it easier for publishers to use and support competing platforms instead of selling AdX.

Google believes the Department of Justice's proposal is technically unfeasible and would create long-term uncertainty for advertisers and publishers. The company is asking Judge Brinkema to take a cautious approach similar to that of a D.C. judge, who recently rejected most of the Department of Justice's proposals in another case involving Google's search monopoly.

Last year, Google had proposed selling AdX during private negotiations with the EU antitrust investigation, and internal research regarding this potential sale may appear as evidence in this week's trial.

Several industry executives are expected to testify in the trial, including former executives from News Corp and executives from DailyMail.com and Advance Local. Advance Local operates local news media in eight states. Some of these witnesses have already testified last year, when the Department of Justice successfully persuaded Judge Brinkema that Google locked publishers into using its ad server platform through illegal bundling strategies