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Google Deemed to Hold Illegal Monopolies in Digital Ad Markets by Federal Judge
In a significant legal setback for the tech giant, a federal judge has determined that Google is operating unlawful monopolies within two distinct sectors of the digital advertising technology landscape. This antitrust ruling could potentially lead to a forced breakup of Google’s expansive online business.
Court Finds Google Violated Sherman Act
US District Judge Leonie Brinkema of the Eastern District of Virginia issued the pivotal decision, concluding that Google violated the Sherman Act through its dominance in both the online publisher ad server market and the ad tech exchange market, which facilitates connections between advertisers and publishers.
“Google solidified its monopoly power by implementing anti-competitive practices on its clientele and eliminating valuable product functionalities,” Judge Brinkema stated in her findings.
The court elaborated, “This exclusionary behavior not only hindered the ability of competitors to contend but also significantly harmed Google’s publishing partners, the competitive process, and ultimately, consumers of information across the open web.”
Market Reaction and Expert Commentary
Following the announcement, shares of Google’s parent company, Alphabet, experienced a slight decrease of 1.2%, trading at $153.64 on Thursday.
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Mike Davis, a former antitrust advisor to President Trump and founder of the Internet Accountability Project, suggested that a Google breakup appears “probable” given the court’s verdicts.
“Google amassed its considerable wealth by monopolizing the online advertising market, and subsequently employed its market influence to stifle competition, harm small enterprises, and suppress conservative voices,” Davis asserted. “This era is drawing to a close.”
Partial Victory Claimed by Google
Judge Brinkema ruled against the Department of Justice’s (DOJ) claim that Google also monopolized a third market related to advertiser ad networks. This aspect of the DOJ’s case was not substantiated during the three-week non-jury trial initiated in 2023 by the DOJ and various state coalitions.
Consequently, Google declared a partial triumph and announced its intention to appeal the unfavorable portions of the judge’s ruling.
“We prevailed on half of this case, and we will challenge the other half,” stated Google Vice President of Regulatory Affairs, Lee-Anne Mulholland.
Mulholland further commented, “We disagree with the Court’s determination regarding our publisher instruments. Publishers possess numerous alternatives and select Google because our ad tech solutions are user-friendly, cost-effective, and efficient.”
DOJ Seeks Divestiture of Google Ad Products
The Justice Department has advocated for the court to mandate that Google divest its digital advertising product suite, notably Google Ad Manager, which encompasses both its publisher ad server and ad exchange functionalities.
Industry Watchdogs Applaud Ruling
Online advocacy groups have celebrated Judge Brinkema’s ruling as a significant victory for those critical of Google’s market power.
“This decree is a definitive win for the American populace that will contribute to reduced prices, heightened competition, and an improved internet experience for all,” affirmed Sacha Haworth, Executive Director of the Tech Oversight Project.
DOJ lawyers argued during the trial that Google exploited its position as the primary intermediary for online ad transactions, thereby harming both publishers and businesses. Federal prosecutors contended that Google’s monopoly allowed it to extract as much as 35 cents from each dollar spent on its advertising platforms.
Evidence presented during the trial included a document where a Google executive purportedly boasted in 2009 about the company’s objective in the digital ads sector to “eradicate” competitors.
Conversely, Google’s legal team contended that the DOJ’s lawsuit was predicated on an outdated understanding of the internet and cautioned against government intervention, warning of “significant risks of errors or unintended repercussions.”
Next Steps: Remedies Phase
Judge Brinkema indicated that a subsequent trial phase will be convened to “determine the appropriate remedies” to address Google’s monopoly status.
Second Major Legal Setback for Google
This ruling represents another substantial legal blow for Google. Just last year, another federal judge concluded in a separate case that Google possesses an illegal monopoly in the online search market.
The remedies phase for the search monopoly trial is scheduled to commence on Monday, with prosecutors seeking various corrective measures, including the potential divestiture of its Chrome web browser.