Google Must Overhaul Global Ad Business After Antitrust Ruling

U.S. District Judge Leonie Brinkema has ordered Google to overhaul its global online advertising business, mandating changes to auction rules to foster competition. In a 106-page opinion, Brinkema stated that the remedies are designed to "effectively pry open to competition the ad tech markets that were injured by Google’s unlawful conduct" and prevent future anticompetitive behavior.

Last year, Brinkema ruled that Google violated antitrust laws concerning open-web display advertising—the ads appearing on websites that help fund online publishers. Google controls multiple facets of this market, including the platforms publishers use to sell ad space, the tools advertisers use to purchase it, and AdX, an exchange for these instantaneous transactions. Historically, Google has profited significantly from this system, charging fees to both publishers and advertisers.

Brinkema found that Google violated Sections 1 and 2 of the Sherman Act by engaging in anticompetitive acts to gain and maintain monopoly power. The court determined that Google illegally tied together its AdX exchange with the tools publishers use to sell ad space, which "deprived rivals of the ability to compete" and harmed publishers, the competitive process, and consumers.

The remedies outlined by Brinkema include several behavioral changes. Publishers using Google's ad server technology will no longer be required to also use AdX, effectively untying the two services. Google must also increase data sharing, permanently stop practices that trapped publishers in its ecosystem, and end preferential auction bidding that favored itself. Publishers will gain the ability to view real-time bids from AdX even when using other ad servers, a measure Brinkema believes will restore competition.

To ensure compliance, a Monitor and Technical Committee will oversee Google's conduct for six years, with the possibility of extension. Google is also required to appoint an internal antitrust compliance monitor. Brinkema emphasized the necessity of this oversight due to the "gravity" of Google's antitrust violations.

The Department of Justice, which brought the case along with attorneys general from over a dozen states, had sought to force Google to divest AdX. However, Brinkema deemed a sale "neither realistic nor needed," citing her belief that the imposed behavioral remedies would be sufficient and that a divestiture could impact other Google services beyond the scope of the case.

In response to Google's argument that the court should not impose injunctions outside U.S. borders, Brinkema asserted that a worldwide application would necessitate product changes consistent with Google's global operations.

This ruling follows other legal actions against Google's advertising practices. The European Commission has fined Google for antitrust breaches in the EU, and a separate class-action lawsuit in New York by thousands of publishers claims Google overcharged them for its advertising technology services. The Virginia case, initiated in 2023, highlighted testimony from media organizations like The Daily Mail, Gannett, and News Corp., whose witnesses stated they were compelled to use Google's technology, resulting in revenue losses.

Despite Brinkema's ruling, Google has stated it disagrees with the finding that it violated antitrust laws and intends to appeal the decision. In a separate, but related case earlier in 2024, a judge ruled that Google held an illegal monopoly in online search but rejected the DOJ's bid to force the sale of its Chrome browser.