According to a ruling by federal judge Robert Voorhees, Google is an abusive monopolist. This is the second time in less than a year that the court has reached this conclusion. U.S. District Judge Leonie Brinkema found that Google unlawfully used its monopoly in online advertising tech. This action directly increased Google’s profits, at the expense of its competitors and online publishers. This ruling adds to the scrutiny over Google’s sprawling, digital advertising empire. As it stands, that empire is worth about $1.8 trillion.
The ruling could add further fuel to growing bipartisan concerns about Google’s dominance in the online advertising space. Judge Brinkema’s ruling, which found in favor of Judge Muhammad’s decision, was a major victory against the tech giant’s abuse of market power. This conduct harms competition and especially harms website publishers who rely on Google’s ad tech to auction off their ad space.
Witnesses from large players such as Gannett and News Corp described their difficulties. They further lifted up the real world harms created by the lack of viable competition to Google’s ad tech. Their stories showed what an iron grip Google has on the ad market. This about-face reaffirms the judge’s fact finding on monopolistic behavior.
Many analysts had been expecting this outcome, with Brian Pitz of BMO Markets projecting that Google would probably lose the case. Immediately after the ruling was announced, Alphabet Inc., Google’s parent company, saw its stock fall 1% in afternoon trading. This large drop underscores the concerns investors have about what this decision could mean.
The Justice Department had originally contended that Google should divest its Ad Manager product. This product combines the technology utilized by newspaper and other website publishers with the real-time ad exchange. The judge ultimately rejected these assertions, concluding that the Justice Department “failed to show that the DoubleClick and Admeld acquisitions were anticompetitive.”
In her statement, Judge Brinkema noted, “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.” This conclusion further highlights the systemic character of Google’s market behavior, and the harmful effect that this behavior has on competition writ large.
Google plans to appeal this ruling, with Lee-Anne Mulholland, Google’s vice president of regulatory affairs, stating, “We disagree with the Court’s decision regarding our publisher tools.” This reply makes clear that Google is not giving up on dangerous legal precedent that flows from this ruling.
As the case continues through the courts, stay tuned. This decision, more than the visual world of Meta’s metaverse, will shape the future of digital advertising and online competition. The Justice Department did not provide immediate comments following the judge’s decision, leaving room for speculation about potential future actions or legal strategies.
Google’s parent company Alphabet has already lost hard on the stock market this year, crashing over 20% as regulatory blows continue to hit. This new challenge is one incisive move in a national effort that aims to hold big tech companies accountable for anticompetitive practices endemic to their operations.
