Google has illegal advertising monopoly, judge rules
A US judge has ruled tech giant Google has a monopoly in online advertising technology.
The US Department of Justice, along with 17 US states, sued Google, arguing the tech giant was illegally dominating the technology which determines which adverts should be placed online and where.
This is the second antitrust case Google has lost in a year, after it was ruled the company also had a monopoly on online search.
Google said it would appeal against the decision.
“Publishers have many options and they choose Google because our ad tech tools are simple, affordable and effective,” the firm’s head of regulatory affairs Lee-Ann Mulholland said.
US district judge Leonie Brinkema said in the ruling Google had “wilfully engaged in a series of anticompetitive acts” which enabled it to “acquire and maintain monopoly power” in the market.
“This exclusionary conduct substantially harmed Google’s publisher customers, the competitive process, and, ultimately, consumers of information on the open web,” she said.
Google lost on two counts, while a third was dismissed.
“We won half of this case and we will appeal the other half,” Ms Mulholland said.
“The court found that our advertiser tools and our acquisitions, such as DoubleClick, don’t harm competition.”
The ruling is a significant win for US antitrust enforcers, according to Laura Phillips-Sawyer, a professor at the University of Georgia School of Law.
“It signals that not only are agencies willing to prosecute but also that judges are willing to enforce the law against big tech firms,” she said.
She said the verdict sets an important legal precedent and is likely to affect decision-making in corporate America.
Google’s lawyers had argued the case focused too much on its past activities, and prosecutors ignored other large ad tech providers such as Amazon.
“Google has repeatedly used its market power to self-preference its own products, stifling innovation and depriving premium publishers worldwide of critical revenue needed to sustain high-quality journalism and entertainment,” said Jason Kint, head of Digital Content Next, a trade association representing online publishers.
Google owns large companies on the buyer and seller sides of the online advertising market, as well as an ad exchange which matches demand and supply.
Internet users will not notice a difference online as a result of the decision, said Anupam Chander, professor of law and technology at Georgetown University.
But it affects “the division of monies between advertisers, publishers, and ad service providers”.
“The judge seems willing to order structural changes in Google’s ad exchange practices, which may affect Google’s bottom line somewhat, but don’t seem to necessarily threaten its core value proposition as an advertising middleman,” he added.
In an ongoing series of antitrust lawsuits, the US government argues Google and its parent company Alphabet should be broken up – which could include selling off parts of the company such as the Chrome browser.
The US case will now move to a second “remedies” phase, which could also lead to Alphabet being broken up, said John Kwoka, a professor of economics at Northeastern University.
In September, the UK’s competition watchdog provisionally found Google was using anti-competitive practices to dominate the market for online advertising technology.
