Judge Rules Google's Ad Tech Monopolization Illegal, DOJ Seeks Separation

In a significant development, a U.S. judge has ruled that Google engaged in illegal monopolization of its advertising technology. This decision sets the stage for potential legal actions by the U.S. Department of Justice, which has been seeking to separate Google from its advertising technology division. The ruling centers around Google's control over its ad tech division, which manages the auction system for digital ad space. The Department of Justice argues that Google's dominance in this area has harmed competitors and publishers, a claim the judge agreed with. Google, on the other hand, maintains that its superior technology has allowed it to outperform competitors.

The next steps involve the judge hearing arguments on how to address the illegal monopolization. The Department of Justice has been pushing for the separation of Google's ad tech platform, Google Ad Manager, from its parent company. This platform is a significant part of Google's revenue, contributing to both its total income and operating profits. The exact figures for these contributions have been redacted from recent court documents.

The impact of this ruling on Google could be substantial. Legal experts predict that if the ruling stands, Google may need to divest parts of its display advertising business, though the financial impact is expected to be less than 10% of its net income. Google has even shown openness to partial divestment of its ad tech assets. In September, reports indicated that Google proposed selling its ad exchange platform to appease European antitrust regulators, but publishers reportedly rejected the offer.

This decision could have broader implications for the tech industry. The ruling may influence how Google manages its ad tech suite in response to court-ordered remedies. If the Department of Justice prevails, advertisers and publishers could find it easier to switch to alternative ad tech platforms. Politically, both the Biden and Trump administrations have supported this case, indicating a rare bipartisan consensus on taking legal action against big tech companies.

Another antitrust case involving Google's search technology is ongoing, but its impact is seen as less significant compared to the potential loss of Google's ad tech division. A judge in Washington is set to rule on the search technology case next week. However, this is not the end of the legal battle. Google has already indicated it will appeal the ruling, and the federal judge will need to decide on remedies for the illegal monopolization. It could take several years for the case to be fully resolved, especially if no settlement is reached.