Judge rules Google's online advertising unit is an illegal monopoly

ALEXANDRIA, Va. (CN) — A federal judge ruled on Thursday that Google’s grasp of tech tools allows it to wield monopolistic power in the advertising industry, violating the country’s antitrust laws.

The 115-page decision hands a defeat to Google, already convicted of antitrust violations in a separate case involving its search engine.

“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,” ruled U.S. District Judge Leonie Brinkema, a Bill Clinton appointee.

“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. Google further entrenched its monopoly power by imposing anticompetitive policies on its customers and eliminating desirable product features.”

In addition to depriving rivals of a chance to compete, “this exclusionary conduct substantially harmed Google’s publisher customers, the competitive process, and, ultimately, consumers of information on the open web,” she concluded.

While finding Google in violation of antitrust laws, she also dismissed a portion of the government’s case challenging the tech firm’s monopolization of the advertiser ad network market.

“We won half of this case, and we will appeal the other half," said Lee-Anne Mulholland, vice president of regulatory affairs for Google, in a statement. “The court found that our advertiser tools and our acquisitions, such as DoubleClick, don’t harm competition. 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.”

The judge ordered attorneys to schedule arguments for possible remedies to be imposed. The Justice Department asked the judge to order the divestiture of the Google Ad Manager suite, including both Google’s publisher ad server DFP and Google’s ad exchange, AdX, along with any additional structural relief as needed to cure any anticompetitive harm.

The Justice Department in its 2023 complaint charged that Google corrupted legitimate competition in the ad tech industry. “Google, a single company with pervasive conflicts of interest, now controls: (1) the technology used by nearly every major website publisher to offer advertising space for sale; (2) the leading tools used by advertisers to buy that advertising space; and (3) the largest ad exchange that matches publishers with advertisers each time that ad space is sold.”

Google attorneys countered that the government misconstrued the ad market. They argued Google’s ad tech products “enable a robust, multi-sided marketplace characterized by rapid expansion of advertising on internet pages and mobile apps that have allowed publishers to grow their sales. These Google products make it easier for advertisers to reach consumers by placing effective, user-friendly ads online and in apps; assist content publishers in generating more income from the sale of advertising space; and ensure that the interests of consumers are protected by blocking malware and offensive and inappropriate content.”

Brinkema was unconvinced by a part of the Justice Department’s argument. The government “failed to show that the DoubleClick and Admeld acquisitions were anticompetitive. Although these acquisitions helped Google gain monopoly power in two ad tech markets, they are insufficient, when viewed in isolation, to prove that Google acquired or maintained this monopoly power through exclusionary practices,” she wrote.

But she had a different assessment of the claim that Google used its power to tie two products in a way that harmed competition at consumers’ expense: “By forcing Google’s publisher customers to use a product they would not necessarily have otherwise used, by making it difficult for rival publisher ad servers to compete on the merits, and by significantly reducing rivals’ market share, the tying of DFP (an ad-serving platform) to AdX (Google’s ad exchange) has had a substantial anticompetitive effect in the publisher ad server market for open-web display advertising.”

This enabled Google to introduce “a series of anticompetitive policies, practices, and technology changes to its sell-side ad tech tools that were not in its publisher customers’ best interests. These changes decreased product quality and harmed competition by further entrenching Google as the dominant company in open-web display advertising. Google made these changes, despite customer complaints, by exploiting its durable monopoly power in the open-web display ad exchange and publisher ad server markets,” she wrote.

The trial before Brinkema spanned the better part of September. A group of states joined the U.S. Department of Justice in the case.

In a statement Thursday, Virginia Attorney General Jason Miyares applauded the ruling. “Google’s conduct undermined competition and innovation in ad tech, which is fundamental to the vibrant internet we rely on in a free and open society. Today’s ruling is a resounding victory for free markets, fair competition, and the rule of law. No company — no matter how big or powerful — is above the law," he said.