Google is once again in the middle of a major antitrust fight in the United States, this time over its dominance in digital advertising. In a case that closely mirrors earlier antitrust fights over its search business, the Department of Justice (DoJ) and several states are trying to break up key parts of the tech giant’s advertising operations. At the center of the dispute are the company’s publisher ad server and its powerful ad exchange platform, tools that support much of the global online advertising market.
Notably, at the start of this year, Judge Leonie Brinkema ruled that the Sundar Pichai-led company had illegally maintained monopolies in these areas and had unlawfully tied its services together in ways that forced publishers to rely on its products while blocking rivals from fair access to the market. While the ruling did not extend to advertiser ad networks (which the court found to be more competitive), the decision still left the tech giant vulnerable to major changes in one of its most profitable businesses.
And now, the trial that began this month in Virginia is not about whether Google broke the law (that has already been decided) but about what punishment or remedy should follow. Actually, the Justice Department is pushing for major changes that could reshape the digital advertising industry. Its proposals include forcing the company to sell its ad exchange and publisher ad server, and possibly requiring its ad auction system to be more open and transparent so competitors can see how ads are bought and sold.
Meanwhile, the Mountain View-headquartered company has strongly opposed these proposals. The company argues that it has already introduced reforms to give publishers more choices and that its tools help make the digital advertising market more efficient for all participants. It warns that breaking up its ad tech operations would disrupt the internet economy, harming publishers, advertisers, and users too. Also, the tech titan highlighted that competition in digital advertising is already strong, with major players like Amazon and The Trade Desk competing for market share.
The timing of this development becomes significant since Google recently faced a €2.95 billion ($3.5 billion) fine from the European Union over anti-competitive practices in its digital advertising technology. The European Commission concluded that the Sundar Pichai-led company had abused its dominant position by favouring its own ad services (specifically its AdX ad exchange and DFP publisher tools) at the expense of competitors, advertisers, and online publishers. Additionally, last week, the US Federal Trade Commission (FTC) reportedly launched formal investigations into Google and Amazon amid concerns over how the tech giants manage and disclose their search advertising operations.
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