Judge Rules that Google is illegally monopolizing online advertising technology
Google acted illegally to maintain a monopoly in some online advertising technology, a federal judge ruled on Thursday, adding to legal troubles that could reshape the $1.86 trillion company and alter its power over the internet.
Judge Leonie Brinkema of the U.S. District Court for the Eastern District of Virginia said in a 115-page ruling that Google had broken the law to build its dominance over the largely invisible system of technology that places advertisements on pages across the web. The Justice Department and a group of states had sued Google, arguing that its monopoly in ad technology allowed the company to charge higher prices and take a bigger portion of each sale.
“In addition to depriving rivals of the ability to compete, this exclusionary conduct substantially harmed Google’s publisher customers, the competitive process, and, ultimately, consumers of information on the open web,” Judge Brinkema said.
The government argued in its case that Google had a monopoly over three parts of the online advertising market: the tools used by online publishers, like news sites, to host open ad space; the tools advertisers use to buy that ad space; and the software that facilitates those transactions.
Judge Brinkema ruled in the government’s favor in two of those, finding that Google illegally built a monopoly over the publisher tools and the software system. She dismissed the third, the tools used by advertisers, saying the government had failed to prove that it constituted a real and defined market.
Google has increasingly faced a reckoning over the dominant role its products play in how people get information and conduct business online. In August, another federal judge ruled that the company held a monopoly on online search. Judge Brinkema will also have the opportunity to force Google to change its business. In its lawsuit, the Justice Department asked the court pre-emptively to force Google into selling some pieces of the ad tech business it had acquired over time. The government will now assess the ruling to determine what to ask the court to do to remedy the monopoly.
Together, the two rulings and their remedies could check Google’s influence and result in a major restructuring of the company.
“We won half of this case and we will appeal the other half,” said Lee-Anne Mulholland, Google’s vice president of regulatory affairs. “Publishers have many options and they choose Google because our ad tech tools are simple, affordable and effective.”
U.S. Attorney General Pam Bondi called the ruling a “landmark victory in the ongoing fight to stop Google from monopolizing the digital public square.”
“This Department of Justice will continue taking bold legal action to protect the American people from encroachments on free speech and free markets by tech companies,” she said.
The cases against Google are part of a growing push by regulators to rein in the power of the biggest tech companies, which shape commerce, information and communication online. The Justice Department sued Apple claiming that the company’s tightly-knit universe of products and software made it difficult for customers to leave. The Federal Trade Commission sued Amazon for squeezing out small businesses and Meta for killing rivals by buying Instagram and WhatsApp. The trial against Meta started this week.
President Trump has signaled that his administration will continue taking a tough stance on antitrust for the tech industry, despite efforts by tech executives to court his favor. His nominees for the F.T.C. The Justice Department’s top antitrust position and the chair of the F.T.C. have stated that they intend to examine closely the power that tech firms have over online discourse. The Google search case was brought under his first administration.
The ad tech case — U.S. et al. The case, U.S. v. Google, was filed in 2023. It concerns a complex web of programs which sell advertising space on the internet. For example, on a recipe page or a news website. The suite of software includes Google Ad Manager which conducts split-second bidding to place ads every time a user loads up a page. That business generated $31 billion in 2023, or about a 10th of the overall revenue for Google’s parent company, Alphabet.
Part of that business stems from the acquisition of DoubleClick, an advertising software company, for $3.1 billion in 2008. Google now has an 87 percent market share in ad-selling technology, according to the government.
The government argued during a three-week trial in September that Google had a monopoly over multiple pieces of technology that are used to conduct these transactions. The government argued that Google’s dominance allowed it to charge more for each transaction and lock publishers into its software. During the trial, the government called witnesses who had worked for publishers including Gannett and News Corp and for ad agencies that buy space online.
“These are the markets that make the free and open internet possible,” said Aaron Teitelbaum, a Justice Department lawyer, during closing arguments in November.
Google countered that it faced competition not just from other ad tech companies but from social networks like TikTok and streaming platforms. In response to the government’s arguments that it had built its ad tech products to work better together, Google’s lawyers argued that its case was bolstered by a 2004 Supreme Court decision that protects a company’s right to choose with whom it does and does not work.
“Google’s conduct is a story of innovation in response to competition,” Karen Dunn, Google’s lead lawyer, said in her closing argument.
Judge Brinkema disagreed. She said that Google had broken the law by effectively forcing publishers that used the company’s tools to manage ad space to also use their products to facilitate transactions with advertisers.
The company had changed its policies and practices in ways that “decreased product quality and harmed competition by further entrenching Google as the dominant company in open-web display advertising,” she said in her ruling.
But the government failed to prove its case on how Google’s acquisitions of ad technology companies was anticompetitive, Judge Brinkema said in her ruling.
Among the suits filed against big tech companies, antitrust experts have viewed the Google ad technology suit as one of the strongest for the government. It is legal for a company to grow if it is the most innovative. But, the government argued, Google entrenched its monopolies and tied them together — a classic antitrust violation.
“The court is applying very traditional antitrust principles,” said Herbert Hovenkamp, a professor at Carey Law School of the University of Pennsylvania. “I’m surprised the government won.”
Steve LOHR contributed reporting.
