- Google has been found to illegally dominate two markets for online advertising technology.
- The ruling allows for another hearing to determine what Google must do to restore competition in these markets.
- Google’s Vice President of Regulatory Affairs, Lee-Anne Mulholland, stated that the company will appeal the ruling.
- The ruling is seen as a “major inflection point” for Google and the tech sector.
A judge ruled on Thursday that Google illegally dominates two markets for online advertising technology, dealing another blow to the tech giant and paving the way for U.S. antitrust prosecutors to seek a breakup of its ad products.
U.S. District Judge Leonie Brinkema in Alexandria, Virginia, ruled that Google is liable for “willfully acquiring and maintaining monopoly power” in the markets for publisher ad servers and ad exchanges, which sit between buyers and sellers.
The decision clears the way for another hearing to determine what Google must do to restore competition in those markets, such as selling off parts of its business in a trial that has yet to be scheduled. This is the second court ruling finding that Google holds an illegal monopoly, following a similar judgment in a case over online search.
Publisher ad servers are platforms that websites use to store and manage their digital ad inventory. Along with ad exchanges, this technology allows news publishers and other online content providers to generate revenue by selling ads. Brinkema wrote that these funds are the “lifeblood” of the internet.
“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,” Brinkema wrote.
However, she wrote that antitrust enforcers failed to prove a separate claim that the company held a monopoly in advertising ad networks.
U.S. Attorney General Pamela 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.
Google’s Vice President of Regulatory Affairs, Lee-Anne Mulholland, said the company will appeal the ruling.
“We won half of this case, and we will appeal the other half,” she said, adding that the company disagrees with the decision on its publisher tools. “Publishers have many options, and they choose Google because our ad tech tools are simple, affordable, and effective.”
After Thursday’s ruling, Google’s shares dropped 1.4%. Experts previously told Reuters that the tech giant, best known for its search engine, would face a minimal financial hit from a loss in the case.
The DOJ has argued that Google should sell off at least its Google Ad Manager, which includes the company’s publisher ad server and ad exchange.
In September, Reuters reported that Google had previously explored selling its ad exchange to appease European antitrust regulators.
U.S. Senator Amy Klobuchar, a Democrat from Minnesota who previously led the antitrust subcommittee, called the ruling “a big win for consumers, small businesses, and content creators, as it will open digital markets to more innovation and lower prices.”
INFLECTION POINT:
Michael Ashley Schulman, chief investment officer at Running Point Capital, called the ruling a “major inflection point” for Google and the tech sector, highlighting U.S. courts’ willingness to consider “aggressive structural remedies” in antitrust cases.
“This could increase regulatory risk premiums across major tech stocks, especially those like Amazon and Meta that operate similarly integrated ecosystems,” he said.
The U.S. Federal Trade Commission has brought a separate antitrust case against Meta Platforms, accusing the owner of Facebook, WhatsApp, and Instagram of holding an illegal monopoly in personal social networks.
The FTC has accused Amazon.com of unlawfully dominating online retail markets, while the DOJ has sued Apple, claiming it holds a monopoly in the smartphone market.
Both Republican and Democratic administrations have pursued those cases, including U.S. President Donald Trump’s first and second terms, highlighting the enduring bipartisan support for antitrust enforcement.
Google now faces the possibility of two U.S. courts ordering it to sell assets or change its business practices. Next week, a judge in Washington will hold a trial on the DOJ’s request for Google to sell its Chrome browser and take other measures to end its dominance in online search.
During a three-week trial last year on Google’s ad business, the DOJ and a coalition of states argued that Google used classic monopoly-building tactics. Prosecutors stated that Google eliminated competitors through acquisitions, locked customers into using its products, and controlled how transactions occurred in the online ad market.
Google argued that the case focused on the past, when the company was still working on making its tools compatible with competitors’ products, and ignored competition from technology companies like Amazon and Comcast as digital ad spending shifted to apps and streaming video.
In her ruling on Thursday, Brinkema rejected the claims about the acquisitions. However, she stated that Google unlawfully tied publishers’ use of its exchange product to its ad server and enacted anticompetitive policies that were “not in its publisher customers’ best interests.”