Google illegally monopolized some online advertising technology markets, according to a federal judge, whose ruling marked the latest antitrust setback for the company and a challenge to its main source of revenue.
US District Judge
Alphabet shares quickly sank as much as 3.2% on the ruling, then pared losses to close down 1.4% in New York.
“The Court’s ruling is clear: Google is a monopolist and has abused its monopoly power,” said Assistant Attorney General
Brinkema’s decision marked the second time in a year that Google was found by a court to be an illegal monopolist. A trial begins Monday in Washington on a remedy after the company was found to monopolize the online search market. The Justice Department is seeking to force Alphabet
In the ad technology case, Brinkema wrote in her 115-page opinion Thursday that “Google has willfully engaged in a series of anticompetitive acts to acquire and maintain monopoly power in the publisher ad server and ad exchange markets for open-web display advertising.” For over a decade, Google pushed web publishers to use its tools that both placed ads on websites and help manage their advertising business, the judge found.
The judge found that Google “further entrenched its monopoly power” through anticompetitive policies on its customers and by eliminating desirable product features. “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,” she wrote.
Brinkema said she will set separate court proceedings to determine a possible remedy.
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The Justice Department and a group of states sued Google in 2023, arguing the company
In their initial lawsuit, the Justice Department and states sought to have Google’s ad tech business broken up, but Brinkema’s ruling set a high bar for that. She found that the company’s acquisitions in that sector — of DoubleClick and Admeld — were not themselves anticompetitive.
The Justice Department “still faces serious challenges in getting a divestiture, but it is possible,” said
Google said it would appeal the part of the case that it lost. “We disagree with the Court’s decision regarding our publisher tools,” 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.”
A Justice Department spokesperson didn’t immediately respond to requests for comment.
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“Google is now an illegal monopolist twice over,” Kanter wrote.
Much of the Justice Department’s case focused on attacking Google’s past acquisitions, including DoubleClick, which worked with websites to sell ads. Brinkema agreed.
“Google’s bolstering of its publisher-facing business through the DoubleClick acquisition helped it establish a dominant position on both sides of the ad tech stack,” she wrote.
Google’s ad tech business benefited from “network effects,” as the more advertiser customers the company had, the more publishers wanted to use its tools, Brinkema added. In addition, the more publishers Google had as customers, the more advertisers wanted to use Google’s services, “thereby creating a self-reinforcing positive feedback loop.”
The Justice Department also sought sanctions against Google for alleged intentional destruction of evidence.
“Google’s systemic disregard of the evidentiary rules regarding spoliation of evidence and its misuse of the attorney-client privilege may well be sanctionable,” Brinkema ruled. But because she ruled for the government on the available evidence, sanctions are not necessary, she said.
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In ruling for the Google on the advertiser-side market, Brinkema found that advertisers can choose different options based on “perceived return on advertising expenditures.”
The judge pointed to the owner of a beauty tech startup who testified that she switched from Google’s AdWords to Instagram based on her experience with each platform. She wrote “the advertiser is the consumer and is focused on reaching users regardless of which channel they are using.”
And while Brinkema found that Google’s deals boosted the company’s monopoly power, “the government failed to show that the DoubleClick and Admeld acquisitions were anticompetitive.”
US v. Google, 23-cv-00108, US District Court, Eastern District of Virginia (Alexandria).
(Updates with DOJ statement in fourth paragraph.)
--With assistance from
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Elizabeth Wasserman, Michael Shepard
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