In a major judgment, a federal judge decided that Google improperly maintained a monopoly on some of its adtech business, potentially forcing the tech behemoth to divest one of its most valuable divisions and upend the infrastructure that underpins much of the online ad market.
Following a three-week bench trial, the court ruled that Google violated antitrust laws by preserving monopolies in two crucial areas: publisher ad servers and ad exchanges. Publishers use ad servers to manage their ad inventory, and ad exchanges enable publishers to sell ad space via supply-side platforms, specifically Google’s AdX product. The judge also determined that Google violated antitrust rules by unlawfully tying its ad server, formerly known as DoubleClick for Publishers (or DFP), to AdX.
“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,” the judge ruled.
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The Department of Justice laid out its case against Google, claiming that the internet behemoth monopolized key aspects of its advertising operations.
Index Exchange’s president and CEO, Andrew Casale, told ADWEEK that “the judge got it right, and this ultimately marks a check on big tech.” Casale testified on the first day of the trial in Virginia, describing it as “one of the most intimidating experiences” of his life.
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“This is going to usher in an era of a more competitive open Internet,” the politician said.
Google’s publisher technology was deemed to be in breach, whereas its advertiser-focused products were not. Brinkema disregarded the DOJ’s arguments that advertisers’ ad networks would have their own market. The verdict implies that Google has a monopoly on its sell-side products but not on its buy-side tools.
Court filings also show that the judge found no sufficient security or quality justifications for Google’s AdX-DFP partnership.
Industry experts, including Casale and Jay Friedman, CEO of the ad agency Goodway Group, testified that Google’s adtech was no more effective than other suppliers in combating fraud, malware, and spam.
According to Casale, header bidding carried no higher risk of fraud or virus than bidding within Google’s adtech stack. According to Friedman, all significant ad exchanges offer comparable quality inventory.
However, Brinkema claimed that Google’s reasoning for the AdX-DFP tie was either “pretextual or, at best, incidental to the primary purpose of the tie, which was to acquire and maintain market power in the open-web ad exchange and publisher ad server markets.”
The decision opens the door to remedies that might fundamentally alter how digital ads are purchased and sold. According to eMarketer, Google controls 25.6% of the $303 billion digital advertising industry in the United States. Meta follows with 21.3%, while Amazon has 13.9%.
While the court has yet to decide what structural changes, if any, would be enforced, the case is one of the most serious antitrust actions brought against a US technology giant in decades.
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It also represents Google’s second big court defeat in the last year, following a separate DOJ antitrust case aimed at the company’s search dominance. During that trial, the DOJ urged Google to divest its Chrome browser.
Next, Brinkema will decide on suitable remedies for the adtech antitrust trial, which may include requiring Google to divest all or part of its profitable adtech stack, which might have far-reaching consequences.
“We applaud this decision, and it’s a great day for advertisers, publishers, the industry, and the general public,” said Arielle Garcia, chief operating officer of industry watchdog Check My Ads.
In a statement, Google’s VP of regulatory relations, Lee-Anne Mulholland, stated that the tech giant won half of the lawsuit.
“We won half of this case, and we will appeal the other half,” Mulholland stated. “The Court concluded that our advertiser tools and acquisitions, such as DoubleClick, do not damage competition. We do not agree with the Court’s decision on our publishing tools. Publishers have many choices, but they select Google because our adtech products are easy, affordable, and effective.”
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