Federal Judge Rules Google Illegally Monopolized Key Online Advertising Markets

In a setback for Google’s advertising empire, a federal judge has determined the tech giant illegally maintained dominance over critical segments of the online ad market, according to Bloomberg.

U.S. District Judge Leonie Brinkema ruled on Thursday that Alphabet Inc.’s Google violated antitrust laws by monopolizing two significant markets in the digital advertising ecosystem: advertising exchanges and publisher ad servers. These tools are central to the buying and selling of display ads on the open web.

Per Bloomberg, Judge Brinkema found that Google had “willfully engaged in a series of anticompetitive acts” aimed at consolidating its hold over these technologies. By tying its ad exchange to its ad server through restrictive contracts and deep technological integration, Google created a system that discouraged competition, the court concluded.

In contrast, the court found that Google did not meet the threshold for monopolization in a third market—ad tech tools used by advertisers to buy display ads—offering the company a partial reprieve.

Related: Google Faces £5 Billion Class Action in UK Over Alleged Online Search Monopoly

Still, the ruling delivered an immediate financial impact: Alphabet shares dropped as much as 3.2% following the announcement, while rival ad tech company Trade Desk saw its stock jump nearly 8%, per Bloomberg.

Judge Brinkema noted that Google’s actions not only suppressed competition but also harmed both its publishing clients and consumers, by limiting product innovation and reducing choices available in the open-web advertising space.

The lawsuit, initiated by the Department of Justice and a coalition of states in 2023, accused Google of unlawfully monopolizing three aspects of the ad tech stack: ad servers, exchanges, and networks. This decision narrows the government’s claims but reinforces the case that Google exercised unlawful control in parts of the market.

This ruling marks the second significant legal defeat for Google in recent years. The company was previously found to have illegally monopolized the search market in a separate federal case. In that ongoing matter, the Justice Department is pushing to force Alphabet to divest its Chrome browser, with a trial on possible remedies scheduled to begin Monday in Washington.

The case, US v. Google, continues in the Eastern District of Virginia under case number 23-cv-00108.

Source: Bloomberg