A US federal judge has ruled that Google has built “monopoly power” illegally with its web advertising business.
In what is being seen as another blow to the tech giant that strengthens the US antitrust prosecutors’ demand to break up its ad products, Virginia District Judge Leonie Brinkema said in a 115-page ruling that Google was liable for “willfully acquiring and maintaining monopoly power” in the markets for publisher ad servers and ad exchanges, which sit between buyers and sellers.
Several news companies have argued that tech companies like Google and Facebook take a major chunk out of the revenue that should go to the company that created the content. Among the witnesses who appeared for the government were people who worked for major publishers as well as ad agencies that buy space online.
Google’s ad monopoly ruled
It is the second court ruling that the tech giant holds an illegal monopoly, following a similar judgment in a case over online search. The decision sides with the Justice Department in a landmark case against the tech giant that could reshape the basic economics of running a modern website.
Together, the two rulings could check Google’s influence and result in a major restructuring of the company.
The ad tech case against Google was filed in 2023 by the Department of Justice (DOJ) and 17 states. It accuses the company of creating an intricate web of programmes to sell internet ad space, with software like Google Ad Manager that conducts split-second auctions to place ads each time a user loads a page.
According to the government, that business generated US$31 billion in 2023 for Alphabet, Google’s parent company. The government has also estimated that Google now has an 87 per cent market share in ad-selling technology.
The judge said Google illegally dominates two markets for online advertising technology. Publisher ad servers are platforms used by websites to store and manage their digital ad inventory. Along with ad exchanges, the technology lets news publishers and other online content providers make money by selling ads.
Those funds are the “lifeblood” of the internet, Brinkema wrote, adding: “In addition to depriving rivals of the ability to compete, this exclusionary conduct substantially harmed Google’s publisher customers, the competitive process, and, ultimately, consumers of information on the open web.”
However, antitrust enforcers failed to prove a separate claim that the company had a monopoly in advertiser ad networks.
The company said it will appeal the ruling and that the company disagrees with the decision on its publisher tools.
Lee-Anne Mulholland, vice president of regulatory affairs, said: “We won half of this case and we will appeal the other half. Publishers have many options and they choose Google because our ad tech tools are simple, affordable and effective.”
But US Attorney General Pamela Bondi called the ruling “a landmark victory in the ongoing fight to stop Google from monopolising the digital public square”.
Bondi added: “This Department of Justice will continue taking bold legal action to protect the American people from encroachments on free speech and free markets by tech companies.”
Big tech companies have been facing the heat from government regulators. The DOJ has sued Apple, claiming it holds a smartphone monopoly, while Meta Platforms faces an antitrust case brought by the Federal Trade Commission (FTC) for holding an illegal monopoly in personal social networks with its Facebook, WhatsApp and Instagram. FTC has also accused Amazon of unlawfully dominating online retail markets and squeezing small businesses.
The company faces another case against the DOJ in Washington next week. In the three-week trial starting Monday, the DOJ is requesting that the judge order Google to sell its Chrome browser and take other measures to end its dominance in online search.
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