Judge rules Google has illegal ‘monopoly’ on web ad technology

Google has an illegal monopoly on some web advertising, a federal judge ruled Thursday, delivering a victory to the federal government that brought the antitrust challenge against the tech giant.

If it stands, the ruling could rewrite the economics of online advertising and affect the bottom lines of websites that rely on ads for revenue, experts said.

U.S. District Judge Leonie Brinkema found that Google was too dominant while pushing its rules on the ad market. In one case, Google was nine times the size of its closest competitor.

“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.

She said the next step would be to determine the consequences.

The ruling is Google’s second major antitrust defeat. Last year, another federal judge held that Google maintained an illegal monopoly on searches and search term advertising and worked to make itself the default search tool on many devices.

The Justice Department, in that case and the ad market case, argued that Google should be forced to divest parts of its business to restore competitiveness.

Abigail Slater, assistant attorney general for the Justice Department’s antitrust division, said the ruling should serve as a warning to platforms that have censored or excluded American voices.

“Today’s opinion confirms Google’s controlling hand over online advertising and, increasingly, the internet itself,” she said.

In a three-week trial last year, Judge Brinkema said experts explained Google’s ability to shut out potential competitors from some key online ad markets.

She said customers had lower product quality because of Google’s monopoly.

The Justice Department, joined by nearly 20 states, argued that Google maintained an illegal monopoly in three ad tech markets: the publisher ad server market, which manages advertising inventory; the ad exchange market, which runs auctions to place ads; and the advertiser ad network market.

Google disputed those divisions.

Judge Brinkema sided with the government on two of them but said there was no distinct advertiser ad network market and thus no monopoly.

Google saw that as somewhat of a victory.

“We won half of this case, and we will appeal the other half,” said Lee-Anne Mulholland, Google’s vice president for regulatory affairs.

“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,” she said.

The Competitive Enterprise Institute, a free market advocacy group, said monopolies have two standard yardsticks — artificially high prices or artificially low supply — and Google’s behavior didn’t trigger either.

“If Google did have a monopoly, it was doing a terrible job of taking advantage of it,” said Ryan Young, a senior economist at CEI.

The issue is whether Google distorts the market for placing ads with online publishers.

Judge Brinkema said Google used DFP, its platform for publishers to sell their ad space, to give preferential treatment to its own ad exchange, AdX.

Judge Brinkema concluded that this amounted to an artificial boost in revenue and gave Google inside information on how ad space auctions were operating at any given time.

When an alternative to AdX emerged in 2014, letting publishers solicit real-time bids from other ad exchanges, Google struck back.

Judge Brinkema said it created a tool that pushed activity into Google’s DFP environment and extracted a fee for transactions made outside AdX.

Google also lowered bids from sales on non-AdX exchanges.

One main competitor reported a 40% drop in revenue.

Although the case was brought and argued during the Biden administration, the Trump Justice Department celebrated the win.

Attorney General Pam Bondi called it a “landmark victory in the ongoing fight to stop Google from monopolizing the digital public square.”