WASHINGTON, D.C. — On Thursday, a U.S. judge determined that Google abused its dominant position in the online advertising technology sector, dealing a significant setback to the company’s income source.
The federal government and more than a dozen US states filed the antitrust suit against Alphabet-owned Google, accusing it of acting illegally to dominate three sectors of digital advertising — publisher ad servers, advertiser tools, and ad exchanges.
“As Google’s monopolistic practices enable it to amass disproportionate earnings, this leaves fewer resources for employees and enterprises reliant on internet ads for their income,” stated New York Attorney General Letitia James, who was involved in filing the lawsuit.
From large news agencies to tiny independent bloggers, everyone has faced financial difficulties due to Google’s actions.
It is one of two federal suits targeting Google that could ultimately see the company split up and curb its influence — and part of a wider government push to rein in Big Tech.
Most websites utilize Google’s advertising software solutions which collectively provide no means for publishers to avoid relying on Google’s ad tech, according to the plaintiffs.
Judge Leonie Brinkema concurred with much of the logic presented, deciding that Google has established an unlawful monopoly over advertising software and instruments utilized by publishers. However, she partly rejected the claim concerning tools employed by advertisers.
Brinkema stated in her decision that Google deliberately carried out several actions against competition to gain and sustain monopolistic control over publisher ad servers and ad exchanges in the realm of open-web display advertising.
The judge determined that Google strengthened its monopolistic control through anti-competitive client policies and by removing appealing product functionalities.
“Beyond denying competitors the chance to vie for business, these exclusive practices significantly damaged Google’s publishing clients, disrupted fair competition, and ultimately hurt end-users accessing content across the broader internet,” Brinkema noted.
Google swiftly promised to contest the decision.
“The company secured victory in half of this case and plans to contest the remaining portion through an appeal,” stated Lee-Anne Mulholland, the vice president for regulatory affairs at the organization.
“As per the court’s decision, our advertising tools along with our mergers, like DoubleClick, do not pose a threat to competition,” stated Mulholland.
According to Evelyn Mitchell-Wolf, who is a senior analyst at eMarketer, she states that “it’s abundantly clear: the tide has shifted against Google and other major players in the digital advertising industry when it comes to antitrust issues.”
“The impact of the consequences will rely on the legal measures used,” Mitchell-Wolf told AFP.
What to do?
Initiated during the presidencies of Donald Trump and Joe Biden, five significant antitrust lawsuits have been brought forth by the Federal Trade Commission and the US Justice Department against prominent American tech firms.
These instances signify a robust change in antitrust enforcement, following a comparatively calm era in antitrust prosecutions since the Microsoft case in the latter part of the 1990s.
Last month, a United States judge determined that Google holds a monopoly through its leading search engine. Currently, the company has filed an appeal against this decision.
Internet advertising serves as the main source of income for Google, financing popular free services like Maps, Gmail, and search functionalities.
Funds flowing into Google’s treasury also enable the tech giant based in Silicon Valley to invest billions of dollars in AI initiatives, as it aims to stay competitive with competitors.
Brinkema provided lawyers from both parties involved in the online advertising technology lawsuit with a deadline of one week to present a timeline for presenting their arguments about the sanctions that should be applied to Google.
Proposing for Google to separate its advertising publishing and trading units could likely be part of the plaintiffs’ suggestions.
For Mitchell-Wolf, the decision carries “significant consequences for the advertising sector.”
The analyst stated, “Given how profoundly integrated Google’s advertising technology is with the open web, altering the current system might devastate fragile publishers.”
Nicole Gill, co-founder of the advocacy organization Accountable Tech, described Brinkema’s ruling as a “huge win,” whereas Amnesty International Secretary-General Agnes Callamard urged for a “breakup of Google that respects human rights.”