Google holds an illegal monopoly in ad sales, court rules
Updated: Google’s advertising technology unit is an illegal monopoly, a federal court in Alexandria, Virginia, ruled Thursday, deepening the internet titan’s regulatory woes and raising the specter that it may have to divest itself of a major source of revenue.
The decision by U.S. District Judge Leonie M. Brinkema of the U.S. District Court for the Eastern District of Virginia is another major blow for Google after it lost another federal monopoly case last year filed by the Justice Department against its search engine. In 2023, a jury found Google broke monopoly laws in how it operated its app store, and the company is also facing antitrust pressure in the European Union.
Brinkema said in her judgment that Google “has willfully engaged in a series of anticompetitive acts to acquire and maintain monopoly power in the publisher ad server and ad exchange markets for open-web display advertising.”
The case, combined with the company’s other antitrust challenges, has the potential to broadly reshape the internet landscape, weighing on Google’s parent company Alphabet as it scrambles for footholds in emerging fields against the likes of OpenAI and TikTok.
Google is already bracing for fallout after the separate landmark ruling in August that Google’s ubiquitous search engine operates as an illegal monopoly, with a hearing on consequences scheduled to start Monday. The Justice Department has asked Judge Amit P. Mehta of the U.S. District Court for the District of Columbia to order the divestiture of Google’s Chrome browser, among other tough remedies that would amount to the harshest punishment for a tech company for antitrust violations in decades.
“This year will be one where Google’s fate hangs in the balance,” said Damian Rollison, senior director of market insights for SOCi, an advertising technology company. “Big Tech is facing a reckoning this year as regulators get serious about its outsized influence in our economy and our cultural life.”
The case in Virginia revolves around Google’s role in brokering the sale and placement of millions of ads every day on websites all over the web. The judge found Google holds an illegal monopoly over two parts of the market that serve web publishers and has now ordered the company and the government to come up with potential “remedies” or fixes to stop Google’s monopolistic behavior. The judge ruled Google does not have a monopoly in the part of the market that serves advertisers themselves.
“We won half of this case and we will appeal the other half,” Lee-Anne Mulholland, Google’s vice president of regulatory affairs, said on X after the decision came out. “We disagree with the Court’s decision regarding our publisher tools. Publishers have many options and they choose Google because our ad tech tools are simple, affordable and effective.”
A spokesperson for the Justice Department did not respond to a request for comment.
Every day, hundreds of millions of ads are shown to people on websites all over the internet. Hundreds of technology companies work behind the scenes to hold auctions, match ads with specific people based on their online data, and pass payment between advertisers and website owners. Google is the most important company providing this technology, having acquired smaller firms that owned different parts of the market over the past two decades.
In early 2023, the Justice Department filed the lawsuit with a group of state attorneys general, accusing Google of having “rigged the rules of auctions” for online ads, to the detriment of web publishers, advertisers and general consumers.
They alleged Google used its control of different important pieces of the technology needed to place digital ads to force advertisers and publishers to use more of its own products, to the detriment of competitors.
In her decision, Brinkema ruled that Google engaged in “tying,” or requiring customers to use one of its products to benefit from another.
“For over a decade, Google has tied its publisher ad server and ad exchange together through contractual policies and technological integration, which enabled the company to establish and protect its monopoly power in these two markets,” the judge wrote.
Thursday’s judgment leaves Google facing questions about the future of its display advertising unit, which generates about $8 billion a quarter, roughly a tenth of the company’s total.
Critics of Google’s dominance over the internet cheered the victory and pressed the government to push for a breakup of Google’s business. “Breaking up Google’s ad tech empire by forcing it to divest its publisher ad server and ad exchange should now move forward with urgency,” Barry Lynn, director of the Open Markets Institute and a longtime crusader against Big Tech power, said in an email.
Google’s lobbyists shot back at the decision.
“Unfortunately, the Justice Department’s continued pursuit to punish Google for its success in a narrow part of the advertising ecosystem threatens to set a troubling precedent for America’s innovators,” said Kate Brown, a spokesperson for the Don’t Break What Works campaign, an effort to oppose antitrust reform funded by the Computer and Communications Industry Association.
Google is one of the world’s most valuable companies and dominates huge swaths of the internet. But hefty antitrust penalties could cut down the company’s control. Other tech giants such as Microsoft, Apple and Amazon, along with newer start-ups, would all stand to gain if Google stumbles.
Brinkema will next determine what remedies to impose on Google to restore competition to the market. Justice Department prosecutors have made no bones about their intention to seek a forced divestiture of the advertising unit. At the same time, Brinkema ruled that Google’s 2007 acquisition of DoubleClick, a major part of its advertising business, was not illegal, potentially making it unlikely that she would order its sale.
The decision comes as the Trump administration moves ahead with a group of antitrust prosecutions of Big Tech companies. Besides the remedy trial for Google’s search business set to start next week, Meta is also defending itself in a trial against claims from the Federal Trade Commission that the company has a monopoly over social media and messaging.
Google chief executive Sundar Pichai has been engaging in a charm offensive with Trump and was one of several Silicon Valley executives to prominently attend his inauguration. Pichai has emphasized the role that Google’s research in emerging sectors such as AI and quantum computing can play in Washington’s goal for the United States to continue to lead the world in technological innovation, an issue Trump often stresses.
“I love Google,” Trump told reporters last week. “They didn’t like me so much in the first administration, but they like me a lot now.”
Updated April 18 at 9:31 a.m. to include additional reporting.
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