Federal Court Finds Google Engaged in Illegal Monopolization of Digital Advertising Sector
A U.S. federal judge has issued a landmark ruling against Google, determining that the tech giant unlawfully maintained monopolistic control over key segments of the digital advertising technology market. The decision comes after extensive litigation examining Google’s business practices in the ad tech ecosystem, including its dominance in ad servers, exchanges, and other critical infrastructure components that facilitate digital advertising transactions. This ruling could potentially lead to significant structural changes in the digital advertising industry and may prompt regulatory actions to foster greater competition in the market.
Court considers forcing Google to sell parts of its business
Now that the court has determined that Google violated the law, the next step will be to figure out how to fix it. The U.S. Department of Justice (DOJ) is seeking strong action, outlining potential divestitures where it may want the firm to sell part of its ad business.
The DOJ urges Google to break up its Google Ad Manager, which combines ad servers and exchange services. After the sales, smaller players would be better able to compete with the larger companies. Those details will be resolved in a later trial, which has not yet been set.
Until then, the tech firm has been under increasing scrutiny from U.S. and European regulators.
This is not Google’s first big antitrust defeat. Another U.S. court ruled the company violated the law following a finding just days earlier that it holds an illegal monopoly over online search, adding to growing calls for stronger action against Big Tech companies.
Industry experts say the ruling could have a ripple effect across other tech giants, such as Amazon, Meta, and Apple. Michael Ashley Schulman, chief investment officer of Running Point Capital, said the decision represented a “major inflection point” for tech regulation.
Google vows to fight the ruling
According to Lee-Anne Mulholland, Google’s vice president of regulatory affairs, the tech firm will appeal the court’s ruling. Mulholland said that the firm had won 50% of the case and would appeal the other 50%. She added that publishers had many options and that Google’s ad tools were easy, affordable, and effective.
No matter the court’s ruling, experts say the short-term financial consequences for Google will be minimal. Its primary profit driver, search advertising, is holding up for now. However, the bigger threat is to Google’s business model and future growth.
Now, the company is staring at the prospect of being compelled to divest key portions of its business — not just in advertising but in parts of Chrome and search. Google shares fell about 1.6% in the immediate aftermath of the ruling.
The tech giant’s courtroom showdown comes as the tech sector is on alert: Meta, Amazon, and Apple are among the other major companies facing grueling antitrust fights.
The Biden administration and previous Republican-led governments have signaled that reining in Big Tech has a rare bipartisan consensus. It’s a reminder that the battle over how to rein in tech behemoths is far from over. As one analyst said, “The era of Big Tech being untouchable is over.”
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