Google has illegal monopolies, judge rules
Google (GOOGL) experienced another setback in court today when U.S. District Judge Leonie Brinkema in Alexandria, Virginia, ruled that the company monopolistically dominated two markets for online advertising technology.
The ruling found that Google dominated the markets for ad servers and exchanges, which sit between buyers and sellers. Although Google did have one minor victory; the judge ruled that antitrust enforcers failed to show the company also had a monopoly in ad networks.
Brinkema’s ruling addresses the $31 billion portion of Google’s ad business that pairs website publishers with advertisers. Google’s technology dictates ad placements on sites across the web.
The judge was unconvinced by Google’s arguments that their ad business was anti-competitive.
“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,” Brinkema wrote in her opinion.
The ruling could have sweeping implications on the economics of websites, although Google will likely appeal and the outcomes from the case could take years to play out.
And it isn’t just in the United States that Google is facing legal pushback. The FTC in Japan recently sent Google a cease-and-desist order after deeming its search practices monopolistic.
Damian Rollison, director of market insights for AI-powered marketing insights SOCi, says that having been on the losing side of multiple court rulings recently Google is on the verge of a major change.
“This year will be one where Google’s fate hangs in the balance. The company stands to lose a lot more in material terms if its ad business, long its main source of revenue, is broken up, whereas divisions like Chrome are more strategically important,” Rollison says.
Rollison compared Google’s battles with Meta’s (META).
“We see that big tech is facing a reckoning this year as regulators get serious about its outsized influence in our economy and our cultural life. However, the remedies of forced divestiture are blunt instruments that may not achieve the desired ends,” Rollison says, adding that better regulation of the kind that is more highly developed in Europe, that protects consumer rights and increases the responsibility of big tech over its content and influence, would be felt by consumers as having a more meaningful impact.