Google found guilty by US court of using its power to control online ads

Google

Google has been accused of breaking antitrust laws by unfairly controlling too much of the online advertising market, a US federal judge has ruled. This is the result of a two-year legal fight after the US government and eight states accused Google of abusing its monopoly power in the ad tech business.

Update: Google has responded to the court ruling, saying it partly agrees with the decision but will challenge the rest.

“We won half of this case and we will appeal the other half,” said Lee-Anne Mulholland, Vice President of Regulatory Affairs at Google. “The Court found that our advertiser tools and our acquisitions, such as DoubleClick, don’t harm competition. We disagree with the Court’s decision regarding our publisher tools. Publishers have many options and they choose Google because our ad tech tools are simple, affordable and effective.”

So, what exactly happened?

Google owns a big chunk of the tools and systems that run digital ads on websites. Two of these tools are:

–Google Ad Manager (DFP) — a platform that helps websites manage and display ads.

–AdX (Ad Exchange) — an online marketplace where advertisers bid in real time to show their ads on different websites.

The court found that Google unfairly forced publishers to use both these tools together. This made it difficult for other companies to compete in the ad tech market and gave Google an unfair advantage in controlling which ads get shown and how much money publishers make.

Now, the big question is — what will happen to Google’s ad business next?

The court hasn’t decided yet, but there are two possible ways to fix this:

– The court might force Google to sell parts of its advertising tools, like Google Ad Manager and AdX, so there’s more competition in the market.

–Instead of breaking it up, the court might let Google keep its business but with restrictions. For example, Google could be banned from giving preference to its own ad systems in auctions where advertisers bid for ad space.

In a separate case last year, another judge found that Google had an illegal monopoly over the internet search market too. The court hasn’t decided on the punishment for that yet but is expected to do so in mid-2025.

Interestingly, in this ad tech case, the judge didn’t fully agree with everything the US government argued. The plaintiffs claimed that Google controlled too much of the market for display ad networks — the ones that help advertisers place ads on websites other than Google, Facebook, or Instagram. The judge said this part wasn’t proven well enough.

But when it came to Google’s control over the tools that publishers use to run ads on their websites, the court agreed that Google misused its power. It was found guilty of unfairly linking together its ad-serving tool (DFP) with its ad exchange (AdX) — something that limited fair competition.

If the court decides to break up Google’s ad business or impose strict rules, it could open up the online ad market to more competition. This might help publishers earn better rates and advertisers get fairer access to ad spaces, instead of everything being dominated by one company.