Google Has Established Illegal Digital Ad Monopolies, US Judge Rules

Takeaways

• A federal judge ruled that Google had illegally maintained monopolies within the digital advertising industry.
• The court will set a schedule to determine next steps, which could include a divestiture of the firm's Google Ad Manager.
• Next week, a new antitrust trial could see Google forced to sell its Chrome web browser.

A U.S. District Court Judge ruled on Thursday that Alphabet’s Google (GOOGL), which is owned by Alphabet, has illegally held monopolies over the online advertising market.

Judge Leonie Brinkema in Alexandria, Va., found that Google violated antitrust laws by "willfully acquiring and maintaining monopoly power" in both the market for publishers selling ad space and the ad exchange market that connects buyers and sellers. Brinkema claimed that the U.S. Department of Justice had failed to prove Google’s monopoly over advertiser ad-networks. 

The court will set a briefing schedule to determine "remedies" for the antitrust violations, which the DOJ has argued should include a divestiture of Google Ad Manager, which houses both the tech giant's publisher ad server and its ad exchange business. 

The DOJ has also pushed Google to sell Chrome after a federal court ruled last summer that the company holds an illegal monopoly on the web search market. Next Monday, the DOJ will begin a trial to determine if Google must sell Chrome, or merely make it easier for businesses to use alternative search engines.

'We Won Half of This Case and We Will Appeal the Other Half'

Google Vice President of Regulatory Affairs, Lee-Anne Mullholland, said: “We won the first half of this case. We will appeal for the second half.” “The Court found our advertiser’s tools and our acquisitions such as DoubleClick do not harm the competition. We disagree with Court’s ruling regarding our publisher tool. Publishers have a lot of options, but they choose Google’s ad tech because it is simple, affordable and effective.” 

In September, the U.K. Competition and Markets Authority accused Google of engaging “anti-competitive practices” by inflating bids from advertisers through its ad network.

Alphabet shares fell 1% during the recent trading on Thursday. The stock is expected to drop 20% by 2025.