Court Rules Google Monopolized Ad Server and Exchange Markets
Google has effectively lost an antitrust lawsuit filed by the U.S. Department of Justice (DOJ) accusing it of illegally monopolizing the online advertising technology market. Following a ruling last August that found Google had illegally monopolized the online search market, the company now faces a second antitrust violation ruling in less than a year, putting its core business at risk of being broken up.
On the 17th (local time), according to CNBC and others, U.S. District Judge Leonie Brinkema of Virginia ruled that Google violated antitrust laws in two of the three sectors of the advertising technology market?ad servers and exchanges?in the DOJ’s lawsuit against Google related to online advertising technology.
In her ruling, Judge Brinkema stated, "For over 10 years, Google has connected the ad server and exchange markets through contract policies and technical integration, thereby establishing and protecting a monopoly position in both markets," adding, "Google imposed anti-competitive policies on customers, eliminated proper product features, and further solidified its monopoly power."
The court found that Google dominates the ad server and exchange markets through its 'AI Ad Manager' platform. Ad servers help place and display ads on various websites, while ad exchanges are platforms where ads are bought and sold in real time. Currently, about 90% of online publishers conduct online advertising through Google, which charges a 20-30% fee on ad spending for using its own platform. Through this, Google generated $31 billion in revenue in 2023, accounting for approximately 10% of its total revenue.
However, the court did not accept the DOJ’s claim that Google illegally monopolized the ad network market, which intermediates between advertisers and publishers.
This ruling follows the DOJ’s lawsuit filed in January 2023, alleging that Google monopolized advertising-related technology and abused its dominance to destroy legitimate competition in the ad tech industry. The verdict came after about a month of trial starting in September last year.
If this ruling is finalized, a subsequent trial will determine the measures Google must take to restore market competition, which could include divesting parts of its business. The DOJ believes Google should sell off its Ad Manager platform.
CNBC reported that Google is in a precarious position, having to defend its core business in court while fending off fierce competition from emerging generative AI technologies like OpenAI’s ChatGPT. Google’s revenue growth has slowed in recent years, and it faces a potential decline in ad spending due to tariffs imposed by former U.S. President Donald Trump.
Google immediately announced its intention to appeal. Liann Mulholland, Google’s Vice President of Regulatory Affairs, said, "We won half of this lawsuit and will appeal the other half," adding, "We disagree with the ruling on publisher tools. Publishers have various options and choose Google because its ad tech tools are simple, affordable, and effective."
Attorney General Pam Bondi described the ruling as "a landmark victory in the ongoing fight to prevent Google from monopolizing the digital public square."
If regulators force Google to divest parts of its advertising business, competitors like Amazon and smaller players are expected to fill the gap. Google is also facing the risk of having to sell its Chrome browser, one of its core businesses, after losing the antitrust lawsuit related to the online search market. The related trial is set to begin on the 21st.
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