Google was found by a federal judge to have illegally monopolised some online advertising technology markets in a blow to a key part of the company’s business.US District Judge Leonie Brinkema found on Thursday (April 17) that the Alphabet Inc. unit violated antitrust law in the markets for advertising exchanges and tools used by websites to sell ad space, known as ad servers. But she said the company didn’t meet the definition of a monopoly for a third market of tools used by advertisers to buy display ads.
Alphabet shares quickly sank as much as 3.2% on the ruling, then slightly pared their losses. The stock was down 1.4% at $151.18 at 11:25 a.m. in New York.
Also Read: Apple won’t move iPhone production to US despite 145% tariffs, analysts warn”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,” Brinkema wrote in the 115-page opinion. For over a decade, Google tied together its publisher ad server and ad exchange through contracts and integrated the technology, “which enabled the company to establish and protect its monopoly power in these two markets.”’Further Entrenched’The judge found that Google “further entrenched its monopoly power by imposing anticompetitive policies on its customers and 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.”Brinkema said she will set separate court proceedings to determine a possible remedy.
The ruling is a second major blow to the embattled tech giant that was already found to have monopolised the online search market in a separate case. In that case, the Justice Department is seeking to force Alphabet to sell off its Chrome browser after winning the landmark ruling over search. The trial on a remedy in that case is set to start Monday in Washington.The Justice Department and a group of states sued Google in 2023, arguing the company illegally monopolised three separate markets related to the technology used for online display advertising: ad servers, exchanges and networks. Spokespeople for the Justice Department and Google did not immediately respond to requests for comment.Also Read: Apple to analyze user data on devices to bolster AI technologyJonathan Kanter, the Justice Department antitrust chief under former President Joe Biden, said in an interview that the ruling “is a huge victory for antitrust enforcement, the media industry, and the free and open internet. I am extremely proud of our team at DOJ and partners from the state attorneys general for this momentous victory.””Google is now an illegal monopolist twice over,” Kanter said.DoubleClick DealMuch 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.”Also Read: Apple’s $640 billion erosion in three days is equal to market cap of four Nifty 50 heavyweightsThe 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.
