Alphabet’s advertising empire was a huge hit. A federal judge on Thursday determined that Google illegally controls two key markets in online advertising and is a major victory for the U.S. Department of Justice in its ongoing antitrust battle with tech giants.
The ruling comes five months after the US government urged federal judges to dissolve some of Google’s businesses, including the Chrome browser and Android OS, and could rebuild the structure of the tech giant.
Federal Court: Google abuses exclusivity in digital ads, breaking up on the table now
Judge Leonie Brinkema of the Eastern District of Virginia found that Google was violating antitrust laws by monopolizing the publisher’s ad server and the market for ad exchange. However, she disagreed with the prosecutor’s claim that Google dominated advertisers’ ad networks.
This decision could put Google’s advertising business in real danger. DOJ argued that the company should be forced to sell Google Ad Manager, including both ad servers and ad exchanges.
And this isn’t the only courtroom that Google deals at the moment. Next week, another federal judge in Washington hears the debate in another case where the government is asking Google to spin off its Chrome browser and hears it takes steps to curb control of online searches.
The Virginia ruling follows a three-week trial last year, during which prosecutors laid out patterns of behavior, including buying rivals, locking clients, and controlling transactions in the advertising market in ways that make it difficult for competitors to acquire position.
Google pushed back saying the lawsuit focused on outdated practices. The legal team argued that the company has since improved interoperability with rival tools, and that prosecutors ignored serious competition with players like Amazon and Comcast.
The DOJ lawsuit was filed with a coalition of states that accused Google of stacking decks and building a digital advertising monopoly.
Reuters previously reported that Google has already been researching the idea of selling part of its advertising business to satisfy European regulators. With this ruling, similar arguments in the US may no longer be an option.
Meanwhile, the Justice Department lawsuit comes after years of criticism that Google’s distinctive role in digital advertising has created conflicts of interest. It controls both the tools advertisers use to place their ads and the platforms publishers use to sell their space. Prosecutors argued that Google would use this position to box out the competition and entrench its advantage.
Judge Leonie Brinkema agreed to the core argument. In her 115-page opinion, she wrote that Google’s practice of linking ad servers and publishers’ ad exchanges gave the company the ability to “establish and protect monopolies in these two markets,” CNN reported.
That part of the case could force Google to break some of its advertising business.
Still, Brenkema did not support all government claims. She dismissed the argument that Google holds exclusive rights on the ad ad network.
He responded to the complicated ruling of Lee-Anne Mulholland, Google’s vice president of regulatory affairs, saying, “We’ll win half of this case and sue the other half.”
“The court has found that advertisers’ tools and acquisitions such as Doubleclick are not harmful to competition,” she added. “We don’t agree with the court’s decision on publisher tools. Publishers have many options. We choose Google because advertising technology tools are simple, affordable and effective.”
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