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Google Is a Monopolist in Online Advertising Tech, Judge Says

The ruling was the second time in a year that a federal court had found that Google had acted illegally to maintain its dominance.

The federal courthouse in Alexandria, Va., where the Google antitrust trial has been held.Credit...Pete Marovich for The New York Times

The federal courthouse in Alexandria, Va., where the Google antitrust trial has been held.Credit...Pete Marovich for The New York Times

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

Judge Leonie Brinkema of the 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 Judge Brinkema, who also dismissed one portion of the government’s case.

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 now considering a request by the Justice Department to break the company up.

Judge Brinkema, too, will have an opportunity to force changes to Google’s business. In its lawsuit, the Justice Department pre-emptively asked the court to force Google to sell some pieces of its ad technology business acquired over the years.

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

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.

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 a 10th 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 percent 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.

Author: Editors Desk, David McCabe, Reporting from Washington

Source: N.Y Times

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