A federal judge determined that Google holds a monopoly in certain segments of the online advertising market, marking the second instance within a year where the company was found to have breached U.S. antitrust laws. Previously, in August, another federal judge ruled that Google maintained an illegal monopoly in the search market.
Judge Leonie Brinkema of the U.S. District Court for the Eastern District of Virginia concluded that Google unlawfully dominated segments of its advertising technology business to exert control over the programmatic ad market, significantly contributing to its revenue. Google generated approximately $30.4 billion from placing ads globally last year, a revenue stream now jeopardized by potential penalties stemming from Brinkema’s decision. A potential outcome for U.S. consumers could be a browsing environment with fewer ads and more content availability.
Brinkema noted that Google’s exclusionary practices harmed both its competitor and publisher clients, negatively impacting the competitive marketplace and consumers seeking information online. Google was found to have violated Section 2 of the Sherman Act, the principal U.S. antitrust law, by intentionally acquiring and maintaining monopoly power in the publisher ad server and ad exchange markets, along with unlawfully tying its publisher ad server (DFP) and ad exchange (AdX).
Google dominates the chain linking publishers and advertisers, a point critics argue allows the company to favor its systems over those of competitors. Some of Google’s market tools were acquired, such as through the purchase of DoubleClick in 2007.
However, Brinkema dismissed the Department of Justice’s accusation that Google monopolized the market for certain advertiser tools, criticizing the government’s market definition as narrow and vague. Consequently, Google was not deemed a monopolist concerning ad-buying tools, but it was found to be so in the market for publisher tools that sell advertising space.
Google has highlighted the partial court victory, with Lee-Anne Mulholland, the vice president of regulatory affairs, stating on X that the company plans to appeal the ruling concerning publisher tools, contending they remain a preferred choice for publishers due to simplicity, affordability, and effectiveness.
The ad tech lawsuit, initiated by the Department of Justice and eight states in January 2023, accused Google of stifling competition by acting as a dominant middleman in the ad market, securing a large portion of ad revenue. Google maintains that substantial competition exists within the online advertising sector. The trial commenced in September, with closing arguments in November.
The Department of Justice has not yet issued a comment regarding the ruling. Jonathan Kanter, who oversaw the trial at the department, expressed on X that the ruling is a significant accomplishment for antitrust enforcement, the media industry, and the open internet.
Previously, in August, Judge Amit Mehta ruled that Google maintained an illegal monopoly in both general search and search text ads. The Justice Department has suggested measures such as ordering Google to divest its Chrome browser and cease preferential agreements with partners like Apple. Google is contesting these proposals, with a trial set to address this beginning on Monday.
Judge Brinkema has now requested Google and the Department of Justice propose a schedule to determine remedies in the advertising technology case, which could potentially result in Google being required to divest its publisher ad tools.
