A U.S. federal judge has ruled that Google illegally monopolized key parts of the online advertising technology ecosystem, dealing a significant legal setback to the tech giant.
The decision was delivered on Thursday by U.S. District Judge Leonie Brinkema in Alexandria, Virginia, following an antitrust case brought by the U.S. Department of Justice and a coalition of states.
Judge Brinkema declared that Google unlawfully dominated two key markets: publisher ad servers and ad exchanges, which are critical digital platforms connecting buyers and sellers of online advertising.
“The Court concludes that the United States is entitled to partial summary judgment on its claims that Google monopolized the publisher ad server market and the ad exchange market in violation of Section 2 of the Sherman Act,” Brinkema wrote.
The case centers on Google’s dominance in digital advertising, an industry that accounts for billions of dollars annually and is central to the company’s revenue model.
Implications for Google
The ruling clears the way for U.S. prosecutors to pursue a breakup of Google’s advertising business.
- The Department of Justice has called for Google to divest its Google Ad Manager, which includes both the publisher ad server and ad exchange tools.
If successful, it would mark one of the most significant antitrust actions against a major technology company in recent U.S. history. Google now faces the possibility of two separate courts ordering asset sales or structural changes to its business practices.
In a related case, a Washington, D.C. judge is set to preside over a separate trial next week concerning Google’s search dominance.
- In this case, the DOJ is pushing for Google to sell its Chrome browser and adopt other remedies to curb its alleged search monopoly.
How Google allegedly built its dominance
During the three-week trial overseen by Brinkema last year, prosecutors argued that Google built its monopoly using anti-competitive strategies such as:
- Acquiring competitors to eliminate threats
- Locking publishers and advertisers into its ecosystem
- Controlling how transactions are conducted in the digital ad market
“Google used classic monopoly-building tactics of eliminating competitors through acquisitions, locking customers into using its products, and controlling how transactions occurred in the online ad market,” prosecutors argued.
Google’s defense
Google pushed back against the allegations, arguing that the allegations focused on outdated practices.
“Prosecutors also ignored competition from technology companies, including Amazon.com and Comcast, as digital ad spending shifted to apps and streaming video,” said Google’s lawyer.
The company claimed it had since improved interoperability with rival platforms and that prosecutors were ignoring substantial competition from tech rivals.