Tag Archives: Google

Google’s digital ad network an illegal monopoly, federal judge rules

Google has been branded an abusive monopolist by a federal judge for the second time in less than a year, this time for illegally exploiting some of its online marketing technology to boost the profits fueling an internet empire currently worth $1.8 trillion.

The ruling issued Thursday by U.S. District Judge Leonie Brinkema in Virginia comes on the heels of a separate decision in August that concluded Google’s namesake search engine has been illegally leveraging its dominance to stifle competition and innovation.

After the U.S. Justice Department targeted Google’s ubiquitous search engine during President Donald Trump’s first administration, the same agency went after the company’s lucrative digital advertising network in 2023 during President Joe Biden’s ensuing administration in an attempt to undercut the power that Google has amassed since its inception in a Silicon Valley garage in 1998.

Although antitrust regulators prevailed both times, the battle is likely to continue for several more years as Google tries to overturn the two monopoly decisions in appeals while forging ahead in the new and highly lucrative technological frontier of artificial intelligence.

The next step in the latest case is a penalty phase that will likely begin late this year or early next year. The same so-called remedy hearings in the search monopoly case are scheduled to begin Monday in Washington D.C., where Justice Department lawyers will try to convince U.S. District Judge Amit Mehta to impose a sweeping punishment that includes a proposed requirement for Google to sell its Chrome web browser.

Brinkema’s 115-page decision centers on the marketing machine that Google has spent the past 17 years building around its search engine and other widely used products and services, including its Chrome browser, YouTube video site and digital maps.

The system was largely built around a series of acquisitions that started with Google’s $3.2 billion purchase of online ad specialist DoubleClick in 2008. U.S. regulators approved the deals at the time they were made before realizing that they had given the Mountain View, California, company a platform to manipulate the prices in an ecosystem that a wide range of websites depend on for revenue and provides a vital marketing connection to consumers.

The Justice Department lawyers argued that Google built and maintained dominant market positions in a technology trifecta used by website publishers to sell ad space on their webpages, as well as the technology that advertisers use to get their ads in front of consumers, and the ad exchanges that conduct automated auctions in fractions of a second to match buyer and seller.

After evaluating the evidence presented during a lengthy trial that concluded just before Thanksgiving last year, Brinkema reached a decision that rejected the Justice Department’s assertions that Google has been mistreating advertisers while concluding the company has been abusing its power to stifle competition to the detriment of online publishers forced to rely on its network for revenue.

“For over a decade, Google has tied its publisher ad server and ad exchange together through contractual policies and technological integration, which enabled the company to establish and protect its monopoly power in these two markets.” Brinkema wrote. “Google further entrenched its monopoly power by imposing anticompetitive policies on its customers and eliminating desirable product features.”

Despite that rebuke, Brinkema also concluded that Google didn’t break the law when it snapped Doubleclick nor when it followed up that deal a few years later by buying another service, Admeld.

The Justice Department “failed to show that the DoubleClick and Admeld acquisitions were anticompetitive,” Brinkema wrote. “Although these acquisitions helped Google gain monopoly power in two adjacent ad tech markets, they are insufficient, when viewed in isolation, to prove that Google acquired or maintained this monopoly power through exclusionary practices.”

That finding may help Google fight off any attempt to force it to sell its advertising technology to stop its monopolistic behavior.

The Justice Department didn’t immediately comment on the judge’s decision.

In a statement, Google said it will appeal the ruling.

“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.”

Analysts such as Brian Pitz of BMO Markets had been predicting that Google would likely lose the case, helping to brace investors for the latest setback to the company and its corporate parent, Alphabet Inc., whose shares declined 1% in afternoon trading. Alphabet’s stock has plunged by 20% so far this year.

As it did in the search monopoly case, Google and its corporate parent Alphabet vehemently denied the Justice Department’s allegations. Their lawyers argued the government largely based its case on an antiquated concept of a market that existed a decade ago while underestimating a highly competitive market for advertising spending that includes the likes of Facebook parent Meta Platforms, Amazon, Microsoft and Comcast.

The market as drawn in the Justice Department’s case didn’t include ads that appear on mobile apps, streaming television services, or other platforms to which internet users have increasingly migrated, prompting Google lawyer Karen Dunn to compare the government’s definition a “time capsule with a BlackBerry, an iPod and a Blockbuster video card” during her opening statement when the trial began last September.

At trial, the Justice Department’s lawyers emphasized the harm to news publishers that has arisen from Google’s alleged dominance of the marketplace. Witnesses from Gannett, the publisher of USA Today and other newspapers, and News Corp., the publisher of The Wall Street Journal, testified about the difficulties they have faced and what they said was a lack of alternatives to Google’s ad tech. Those companies rely on online advertising to fund their news operations and make their articles free to consumers on the internet, government lawyers have argued.

Now, government is in position to try to dismantle that byzantine ad system. When the case was filed more than two years ago during the Biden administration, the Justice Department asserted Google should be forced to sell, at a minimum, its Ad Manager product, which includes the technology used by website publishers and the ad exchange.

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Google remedy hearing on search monopoly begins today. Could the tech giant be broken up?

A hearing kicked off today in Washington, D.C., that could determine whether Google remains in its current form, or if it could face penalties such as selling off its popular Chrome web browser. 

The so-called remedy hearing is the consequence of a court ruling last August that found Google is operating a monopoly and uses its dominant market position to crush rivals and put a lid on innovation. 

The U.S. Department of Justice is arguing that Google should be forced to divest its Chrome browser, which the agency describes as “one of the largest entry points that exists for searches.” By selling Chrome, rivals could have a chance to compete for search queries, the government argues, but such a change would drastically reshape Google’s parent, Alphabet, a tech giant with a $1.8 trillion market valuation. 

“Google can compete, but they simply don’t want to compete on a level playing field,” Justice Department attorney David Dahlquist said on Monday during his opening before the court. “Google is now fearful of competing against rivals who will only get stronger with the proposed remedies in place.”

The hearing comes just days after Google was branded an abusive monopolist in a separate case that ruled the tech giant had illegally exploited some of its online marketing technology to boost profits. The more recent case focused on Google’s online advertising business, which has been built around its search engine and other widely used products, including Chrome and YouTube.

Here’s what to know about the current remedy hearing. 

What is the Google hearing about?

U.S. District Judge Amit Mehta ruled in August that Google has illegally exploited its dominance to squash competition and stifle innovation. 

The current hearing is aimed at addressing potential remedies, with Mehta expected to issue a decision by August 2025, according to a November research note from Goldman Sachs analyst Eric Sheridan. 

“We are not here to relitigate the case, we are here to ask the court to fix the harm from Google’s unlawful conduct,” said Assistant Attorney General Gail Slater in a Monday statement before the hearing’s opening arguments.

What does the Justice Department want? 

The Justice Department is pushing for several changes, Dahlquist said on Monday during the trial. 

They include:

  • Forcing Google to divest the Chrome browser;
  • Requiring Google to share some data to help new entrants overcome barriers to entry;
  • Syndicating search and advertising data that would allow rivals to use Google’s search results to improve their quality.

Some of the changes sought by the DOJ would last for years, with Sheridan noting that the requirements would “include Google enabling ongoing access to its search index, making available user and ads search data (for up to 10 years), syndicating its search text ads data for up to 1 year and syndicating its search results, ranking signals & query understanding information (for queries originated in the U.S.) for up to 10 years.”

What would happen to Chrome?

Jon Sallet, representing a group of states that joined the Justice Department in the case, said in his opening statements that his first priority is the divestiture of Chrome. 

Chrome is a “massively attractive asset” with over 4.1 billion global users, he added. “This kind of asset doesn’t come up very often.”

Divestitures can happen in a number of ways, such as a spinoff or sale of a business unit. In some cases, the existing shareholders of a company — in this case, Google parent Alphabet — receive new shares in the divested business.

AT&T may be one of the best-known companies to have been broken apart after being accused of operating a monopoly. The phone giant split into several smaller companies as part of a 1982 settlement with the U.S. government, leading to the creation of several smaller regional phone operators, such as Bell South and Bell Atlantic. 

Splitting off Chrome would likely deliver a financial hit to Google’s revenue, Goldman’s Sheridan added. It would not only limit Google Search revenue, but would also restrict search query volume and access to user data, he noted. 

What is Google’s response to the DOJ?

Google attacked the government’s proposed antitrust remedies, with its lead attorney, John Schmidtlein, calling them “fundamentally flawed” and arguing that they would unfairly penalize the company for its innovation.

“Google earned its market position through hard work and ingenuity,” Schmidtlein said.

A divestiture of Chrome would be “far from simple,” he said, noting that the remedy would go beyond the browser to include the open-source Chromium project Google created and has supported for years.

“The decree demands not only Chrome but also everything critical to Chromium’s functionality,” Schmidtlein said. “What does that even mean? They’re leaving it up to a technical committee, but there’s no clarity on what constitutes necessary assets.”

He criticized the process, saying it lacks a clear path for evaluating potential buyers, and warned that Google would effectively be barred from the browser market for 10 years. “I can’t think of an antitrust remedy that approaches this,” he added.

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