The U.S. Justice Department and eight states sued Google in 2023 for violation of the Sherman and Clayton Acts, laws governing antitrust policy. In April, Google was found guilty of monopolizing the advertising technology, or ad tech, market through anticompetitive tactics.
In the coming months, Judge Leonie Brinkema will decide the remedy for the verdict in the U.S. District Court for the Eastern District of Virginia.
Brinkema found Google guilty of monopolizing on two of three fronts that were brought to trial: the system advertisers use to place their bids for ad space and the technology that connects buyers and sellers of ad space. They were not found guilty of monopoly on the front of tools being used by ad publishers.
The Justice Department proposed forcing a breakup of Google’s ad tech by sharing a portion of the code that runs auctions with industry competitors and divesting from DoubleClick and Ad Exchange through a sale.
If market competition conditions do not improve in the months following settlement, the department proposes that an independent third-party monitor Google’s progress and that Google possibly sell additional ad tech assets.
Google proposes ceding by altering their auction system to better fit the needs of publishers. This means relinquishing control of tools of their competitors to provide direct usage to the publishers themselves. The company raises concerns that selling off its ad products would have a negative impact on the small businesses whose entire advertising operations rely on Google ad tech.
While this would improve conditions in the short-term for consumers, it would not overall decrease their market share. The role of antitrust policy in the economic landscape is to preserve the integrity of competition in the interest of the consumer. With proper regulations in place, businesses optimize efficiency and quality control while ensuring fair practices.
In an American political system that is increasingly critical of capitalism, the Federal Trade Commission provides a nonpartisan defense for the American consumer.
It is in Google’s best interest to settle so that the company retains ownership of its acquisitions, but that is a near-direct violation of the Sherman Act. When evaluating defendants for a violation, the plaintiff must prove that there are two things happening: interstate commerce and an agreement amongst two or more parties. After that evaluation, while looking at competitive effects, the Justice department found they currently hold 87% of market share, which is undoubtedly anticompetitive. Allowing Google to keep its products would not rectify this situation.
The FTC previously approved the acquisitions that the Justice Department now seeks to break. Reversing these decisions is futile work, given that company counsel will find their way to argue reasonably, so that the government should not take away the privilege first afforded them. The courts are in desperate need of voices familiar with the tech world that can call out and prevent horizontal dominance when it occurs.
Andrew Casale, founder of Index Exchange, an advertising platform for publishers, has said that even when reducing the rates on their site, they saw almost no change in publishers choosing them over Google; their “ad tech ecosystem is due to factors beyond pricing.”
Given the precedent is set before this case, Google will likely settle and keep its ad products for now. Brinkema herself hinted at this reality during the September hearings.
Despite the FTC’s nonpartisan role, there is an undeniable tech giant influence in the federal government. Earlier verdicts also pointed to Google not facing the severe penalties it was originally proposed. It is likely that the courts will side with the conglomerate.
