Judge
The However, the court dismissed a claim that Google monopolizes the advertiser ad network market.
Like the D.C. court that found Google liable under Section 2 of the Sherman Act for monopolization of search services in August 2024, Judge Leonie Brinkema of the U.S. District Court for the Eastern District of Virginia also declined to sanction Google “at this juncture” despite the company’s “systemic disregard of the evidentiary rules regarding spoliation of evidence and its misuse of the attorney-client privilege,” which Brinkema said “may well be sanctionable.”
The 115-page decision detailed the history of digital advertising and the technology behind it before turning to Google’s role in the market and its eventual rise to the top. Despite more recent hybrid models that have popped up, “digital advertising has been the lifeblood of the Internet,” Brinkema wrote.
According to the plaintiffs’ expert, Dr. Lee, “in 2022, Google had a 91% market share of the worldwide publisher ad server market for open-web display advertising as measured by the number of impressions served.” Lee’s estimates matched Google’s internal data, which found its publisher ad server, DFP, “to have between 84% and 90% market share at different points over the past decade.” Open web publishers rarely switch from DFP to another ad server because there are few alternatives, said the decision. B “For over a decade, Google has charged durable supracompetitive prices for AdX–taking 20% of each open-web display transaction–and has exhibited an unwillingness to lower AdX’s take rate even as the market matured and other ad exchanges reduced their prices,” the decision said.
Although the court conceded that “in different circumstances, a market share between 50% and 70% would not necessarily suggest that a firm had monopoly power…here, the direct evidence of AdX charging durable and supracompetitive prices, in combination with its maintaining a market share nine times that of its next closest rival, provides strong support for the conclusion that Google has possessed and still possesses monopoly power in the open-web display ad exchange market.”
Brinkema said the plaintiffs failed to show that Google’s acquisitions of DoubleClick and Admeld were anticompetitive, but they did prove that Google’s tying of DFP to AdX “has had a substantial anticompetitive effect in the publisher ad server market for open-web display advertising.” The judge said Google “forced its publisher customers to use a product they would not necessarily have otherwise used, by making it difficult for rival publisher ad servers to compete on the merits, and by significantly reducing rivals’ market share.”
Google also engaged in anticompetitive behavior via its “First Look” and “Last Look” policies, said the court. First The court explained:
“Here, Google has engaged in tying that effectively has compelled its publisher customers to use DFP if they want to use AdX and receive real-time bids from AdWords advertisers…. The See … Although such tying, like other anticompetitive and restrictive conditions on customers, can be conceptualized as a “conditional refusal
to deal,” that does not mean it should be assessed as a “simple refusal to deal” with rivals, which was the alleged harm in Trinko.”
The court further rejected Google’s contention that its actions at issue were “procompetitive product design choices made for valid business reasons,” as characterized in the opinion.
The court declined to impose sanctions but said, as with the Google Search case, the decision not to sanction “should not be understood as condoning Google’s failure to preserve chat evidence.”
The suit was originally brought by the states of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia, and was later amended to add Arizona, Illinois, Michigan, Minnesota, Nebraska, New Hampshire, North Carolina, Washington, and West Virginia.[]A three-week bench trial was held beginning in September 2024 and included testimony of 39 live witnesses, deposition excerpts from an additional 20 witnesses, and hundreds of exhibits, according to the decision.
