What just happened? The U.S. Department of Justice has argued that Google illegally built "monopoly power" through its web advertising business, manipulating online ad services across multiple sectors and forcing higher fees on publishers reliant on its technology. Judge Leonie Brinkema ruled that the tech giant's anticompetitive behavior harmed publishers, and the DOJ contended that Google should be forced to divest its ad tech business.
A federal judge handed Google yet another courtroom defeat on Thursday, ruling that Google built and maintained an illegal monopoly in key segments of the online display advertising industry. This decision could pave the way for the government to break up Google's advertising operations.
Google's ad server – formerly known as DoubleClick for Publishers (DFP) – controls around 90% of the market and connects websites with advertisers. On the other side, Google's ad exchange, previously called AdX, runs auctions where advertisers bid for those spots. Both are now part of what Google calls Google Ad Manager.
Judge Leonie Brinkema highlighted expert findings showing that Google's ad exchange holds a dominant 54% to 65% global market share, while the next biggest competitor has only 6%. This dominance allowed Google to take about 20% from each ad auction, while competitors earned significantly less. "Plaintiffs have proven 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 judge concluded.
Google also leveraged its control to exclude competitors and grant itself preferential treatment through features such as "First Look" and "Last Look," effectively dominating both sides of the ad transaction. One Google employee likened this to a major bank owning the stock exchange. The judge ruled that these practices violated antitrust laws on three counts under the Sherman Act.
This ruling adds to Google's growing legal troubles. Last year, the company lost a landmark case in which its practice of paying other tech companies billions to make its search engine the default on devices and browsers was deemed anticompetitive.
The DOJ has recommended that the company sell Chrome – the world's most popular browser – and decouple it from Android, the most widely used mobile OS. Google might also be forced to sell Android. Additionally, the company faces similar antitrust action in Canada, the UK, the European Union, China, India, and Japan.
Predictably, Google argues that a breakup would harm customers. Executives from its parent company, Alphabet, have also argued to the Trump administration that forced divestitures would pose a national security risk. Chrome's massive scale could complicate a selloff, as the only companies capable of acquiring it are other tech giants already under antitrust scrutiny.
However, in what Google described as "winning half the case," Judge Brinkema ruled against the DOJ's claims concerning Google's conduct in the market for "open-web display advertiser ad networks." She also cleared the company of accusations that it had deleted internal chat records to influence court proceedings – an issue that had previously undermined its defense.
Those findings were enough for Lee-Anne Mulholland, Google's Vice President of Regulatory Affairs, to declare that the company had won half the case. Google plans to appeal the ruling.
Judge rules Google built illegal ad monopoly, DOJ threatens another breakup
