Google is a monopoly for online advertising tech, judge rules

WASHINGTON >> Google acted illegally to maintain a monopoly in some online advertising technology, a federal judge ruled today, adding to legal troubles that could reshape the $1.88 trillion company and alter its power over the internet.

Judge Leonie Brinkema of U.S. District Court for the Eastern District of Virginia said in a ruling that Google had broken the law to build its dominance over the largely invisible system of technology that places advertisements on pages across the web.

The Justice Department and a group of states had sued Google, arguing that its monopoly in ad technology allowed the company to charge higher prices and take a bigger portion of each sale.

“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,” said Brinkema.

The government argued in its case that Google had a monopoly over three parts of the online advertising market: the tools used by online publishers, like news sites, to host open ad space; the tools advertisers use to buy that ad space; and the software that facilitates those transactions.

Brinkema ruled in the government’s favor in two of those, finding that Google illegally built a monopoly over the publisher tools and the software system. She dismissed the third, the tools used by advertisers, saying the government had failed to prove that it constituted a real and defined market.

Google has increasingly faced a reckoning over the dominant role its products play in how people get information and conduct business online. Another federal judge ruled in August that the company had a monopoly in online search. He is considering a request by the Justice Department to break the company up, with a three-week hearing on the matter scheduled to begin Monday.

Brinkema, too, will have an opportunity to force changes to Google’s business. In its lawsuit, the Justice Department preemptively asked the court to force Google to sell some pieces of the ad technology business it had acquired over the years. The government will now assess the ruling to determine what to ask the court to do to remedy the monopoly.

Together, the two rulings and their remedies could check Google’s influence and result in a major restructuring of the company.

“We won half of this case, and we will appeal the other half,” said Lee-Anne Mulholland, Google’s vice president of regulatory affairs. “Publishers have many options, and they choose Google because our ad tech tools are simple, affordable and effective.”

The Justice Department did not immediately comment.

The cases against Google are part of a growing push by regulators to rein in the power of the biggest tech companies, which shape commerce, information and communication online.

The Justice Department has sued Apple, arguing that the company made it difficult for consumers to leave its tightly knit universe of devices and software. The Federal Trade Commission has sued Amazon, accusing it of squeezing small businesses, and Meta, for killing rivals when it bought Instagram and WhatsApp. The trial against Meta started this week.

President Donald Trump has signaled that his administration will continue taking a tough stance on antitrust for the tech industry, despite efforts by tech executives to court his favor. His choices for FTC chair and the Justice Department’s top antitrust role have said they intend to look closely at the power that tech companies have over online discourse. The Google search case was brought under his first administration.

The ad tech case — U.S. et al. v. Google — was filed in 2023 and concerns an intricate web of programs that sell ad space around the web, like on a news site or a recipes page. The suite of software, which includes Google Ad Manager, conducts split-second auctions to place ads each time a user loads a page. That business generated $31 billion in 2023, or about 10% of the overall revenue for Google’s parent company, Alphabet.

Part of that business stems from the acquisition of DoubleClick, an advertising software company, for $3.1 billion in 2008. Google now has an 87% market share in ad-selling technology, according to the government.

The government argued during a three-week trial in September that Google had a monopoly over multiple pieces of technology that are used to conduct these transactions. The company locked publishers into using its software and was able to take more money off the top of each transaction because of its dominance, the government said.

That hurt websites that produce content and make it available for online for no charge, the government said.

For years, groups representing news organizations, including The New York Times, have argued that the dominance of major tech platforms undermines the media industry. During the trial, the government called witnesses who had worked for publishers including Gannett and News Corp and for ad agencies that buy space online.

“These are the markets that make the free and open internet possible,” said Aaron Teitelbaum, a Justice Department lawyer, during closing arguments in November.

Google countered that it faced competition not just from other ad tech companies but from social networks like TikTok and streaming platforms. In response to the government’s arguments that it had built its ad tech products to work better together, Google’s lawyers argued that its case was bolstered by a 2004 Supreme Court decision that protects a company’s right to choose with whom it does and does not work.

“Google’s conduct is a story of innovation in response to competition,” Karen Dunn, Google’s lead lawyer, said in her closing argument.

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This article originally appeared in The New York Times.

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