Google effectively lost the antitrust lawsuit filed by U.S. authorities, which accused the company of illegally monopolizing certain technology markets related to online advertising. This follows a ruling in August 2022 that found Google guilty of illegally monopolizing the online search market, putting the company at risk of partitioning its business and facing significant setbacks.
On the 17th (local time), a federal judge in Leonie Brinkema in Virginia ruled that Google violated antitrust laws in the online advertising technology market, specifically in two of the three areas of the advertising technology market: advertising servers and exchanges, in the antitrust lawsuit filed by the U.S. Department of Justice.
An advertising server is a market that helps various websites with advertisement placement and publication, and an advertising exchange is a place where ads are bought and sold in real time. Google is judged to have dominated the advertising server and exchange markets through its artificial intelligence (AI) ad manager platform. However, the court did not accept the Department of Justice's claims, stating that there was insufficient evidence to prove illegal monopolization in the advertising network market that intermediates between advertisers and publishers.
Judge Brinkema explained in her ruling, "Google engaged in anti-competitive practices to acquire and maintain monopoly power in the advertising server and advertising exchange markets," adding, "For over a decade, it established and protected monopoly status through contract policies that tie these two markets together and technological integration."
She further noted, "Google imposed anti-competitive policies on customers (such as publishers and advertisers), eliminated proper product features, and solidified its monopoly power, which not only deprived competitors of their opportunities but also severely harmed publishers and ultimately consumers who consume information on the web."
This ruling stems from a lawsuit filed by the U.S. Department of Justice in January 2023, claiming that Google monopolized advertising-related technologies and abused its dominance to destroy legitimate competition in the advertising technology industry. The decision came after a month of hearings from September of last year. If this ruling is finalized, a trial will be held to determine what actions Google must take to restore market competition, which may necessitate the sale of parts of its business.
Currently, about 90% of online publishers, including news sites, conduct online advertising through Google, which charges a commission of 20% to 30% on advertising costs through its own platform. Google generated $31 billion in revenue through this, which accounts for about 10% of the company's total revenue.
Google stated that it will appeal the ruling. A company spokesperson noted, "We won half of this lawsuit and plan to appeal the other half," adding, "We disagree with the ruling regarding the publisher tools. Publishers have a variety of choices, and they choose Google’s advertising technology tools because they are simple, affordable, and effective."
After losing the antitrust case in the online search market, Google is currently facing a crisis regarding the sale of its Chrome browser, one of its core businesses. Related hearings are set to begin on the 21st.