Judge rules Google holds illegal advertising monopoly
A US judge has ruled that Google has an illegal monopoly in online advertising technology, a decision that follows a lawsuit filed by the US Department of Justice and 17 US states.
The lawsuit argued that Google was dominating the technology that determines which ads are placed online and where, and US District Judge Leonie Brinkema agreed, stating that Google had “wilfully engaged in a series of anticompetitive acts” to acquire and maintain its monopoly power.
Judge Brinkema said this exclusionary conduct harmed Google’s publisher customers, the competitive process, and ultimately consumers of information on the open web. Google lost on two counts, while a third was dismissed.
Google said it would appeal the decision, with its head of regulatory affairs Lee-Ann Mulholland stating that publishers choose Google because its ad tech tools are simple, affordable, and effective. She added that the court found Google’s advertiser tools and acquisitions, such as DoubleClick, do not harm competition.
The ruling is seen as a significant win for US antitrust enforcers, with Laura Phillips-Sawyer, a professor at the University of Georgia School of Law, saying it signals that agencies are willing to prosecute and judges are willing to enforce the law against big tech firms.
Experts say the verdict sets an important legal precedent and is likely to affect decision-making in corporate America. Jason Kint, head of Digital Content Next, a trade association representing online publishers, stated that Google has used its market power to self-preference its own products, stifling innovation and depriving premium publishers of critical revenue.
Is Google an illegal monopoly?
The case will now move to a second “remedies” phase, which could lead to structural changes in Google’s ad exchange practices and potentially even the breakup of Alphabet, Google’s parent company.
Some key points from the case include:
- Google’s ad tech dominance: Google owns large companies on the buyer and seller sides of the online advertising market, as well as an ad exchange that matches demand and supply.
- Impact on internet users: Internet users are unlikely to notice a difference online as a result of the decision, but it affects the division of monies between advertisers, publishers, and ad service providers.
- Potential consequences: The US government argues that Google and Alphabet should be broken up, which could include selling off parts of the company such as the Chrome browser.
The UK’s competition watchdog has also provisionally found Google to be using anti-competitive practices to dominate the market for online advertising technology.