Google avoids ad tech breakup as US judge rejects DOJ proposal

Alphabet’s Google has escaped a breakup of its advertising technology business, marking the third time in recent years that United States antitrust enforcers have tried to force a Big Tech breakup and lost.

US Judge Leonie Brinkema in Alexandria, Virginia, on Wednesday declined to make Google sell AdX, where publishers pay Google a 20 percent fee to sell ads in auctions that happen instantly when users load websites.

Recommended Stories

list of 4 items

list 1 of 4Argentina serves up a Messi-shaped schnitzel as fans say goodbye

list 2 of 4Can Ukraine’s drones shut Russian airspace? What that means for airlines

list 3 of 4Uber lays off 3,300 employees in largest cuts since the pandemic

list 4 of 4US oil giant Chevron to expand Venezuela operations

end of list

The US Department of Justice (DOJ) had argued Google could not be trusted to run the online advertising exchange after Brinkema ruled that Google had illegally quashed competition.

The judge accepted behavioural remedies.

The reasoning behind today’s decision was not immediately made public.

Brinkema filed her opinion under seal for 14 days, leaving the details of how Google must change its ad business unknown for now. She gave the two sides 30 days to submit a joint proposed final judgement.

The case focused on Google’s ad tech “stack” – the suite of tools that website publishers use to sell ads and advertisers use to buy them.

Brinkema ruled last year that Google had willfully monopolised both the publisher ad server and ad exchange markets, and had unlawfully tied the two products together.

Google has said it will appeal the underlying liability ruling.

The government’s case portrayed Google as simultaneously controlling multiple sides of the digital advertising marketplace and owning the platform that publishers use to sell ads as well as the exchange where transactions occur – all while commanding huge advertiser demand. Prosecutors had sought the sale of Google’s ad auction site AdX and the open-sourcing of critical auction technology.

Google characterised the proposed remedies as extreme government overreach that would harm publishers, advertisers and consumers. It had also argued that splitting up the service would be technically unfeasible.

AdX is a small part of Google’s business. Google’s shares pared gains slightly after the ruling and were up 0.6 percent.

The company welcomed the court decision. “We’re very pleased the court rejected the DOJ’s proposal to break apart tools that help small businesses reach new customers and grow,” said Google executive Lee-Anne Mulholland.

The DOJ is “pleased that the court ordered substantial relief”, it said in a social media post on X.

“We are one step closer to restoring competition and bringing relief for the American people in online advertising markets. The Department is evaluating appropriate next steps,” the DOJ said.

US tech crackdown in jeopardy

While Google has been ordered to change some business practices, the ruling is the third time in a row that a judge has rejected a bid by US antitrust enforcers to break up Big Tech.

Sacha Haworth, executive director of The Tech Oversight Project, said the rulings “prove that the courts alone will not save us from Big Tech”. The advocacy group has proposed legislation aimed at restoring competition in digital advertising.

A federal judge in Washington last year rejected an attempt by the Federal Trade Commission (FTC) to make Meta Platforms sell off Instagram and WhatsApp, saying the agency failed to prove that Meta holds a monopoly in a social media landscape that has shifted drastically since the case was brought in 2020. The FTC has filed an appeal.

Likewise, another judge in Washington, who previously ruled that Google holds an illegal monopoly in online search, rejected the DOJ’s bid to make the company sell its Chrome browser, citing rising competition from generative artificial intelligence companies such as OpenAI’s ChatGPT.