On Monday, Google faces a new federal court test as U.S. government lawyers ask a judge to order the breakup of the search giant’s ad technology business. This is Google’s second such challenge this year, following a similar government demand to split up its empire being shot down by a judge earlier this month.
Monday’s case focuses specifically on Google’s ad tech “stack”—the tools website publishers use to sell ads and that advertisers use to buy them. In a landmark decision earlier this year, Federal Judge Leonie Brinkema sided with the U.S. Department of Justice (DOJ), finding that Google had an illegal grip on this market. The trial on Monday is set to determine the penalties and changes Google must implement to undo its monopoly.
According to court filings, the U.S. government will argue that Google should spin off its ad publisher and exchange operations. The DOJ will also ask that after the divestitures are complete, Google be banned from operating an ad exchange for 10 years. Google will counter by arguing that the divestiture demands go far beyond the court’s findings, are technically unfeasible, and would be harmful to the market and to smaller businesses.
“We’ve said from the start that DOJ’s case misunderstands how digital advertising works and ignores how the landscape has dramatically evolved, with increasing competition and new entrants,” said Lee-Anne Mulholland, Google’s Vice President of Regulatory Affairs.
Similar Case in Europe
In a similar case in Europe, the European Commission, the EU’s antitrust enforcer, fined Google €2.95 billion ($3.47 billion) earlier this month for its control of the ad tech market. Brussels ordered behavioral changes, drawing criticism that it was being too lenient on Google, as it had previously indicated a divestiture might be necessary.
This remedy phase of the U.S. trial follows a first trial that found Google was operating an illegal monopoly. It is expected to last about a week, with the court scheduled to meet again for closing arguments a few weeks later. The trial begins in the same month that a separate judge rejected a government demand that Google divest its Chrome browser in a different case. That case, also brought by the DOJ, found Google responsible for an illegal monopoly, this time in the online search space. Instead of a major breakup, Google was required to share data with rivals as part of its remedies. The U.S. government had pushed for Chrome’s divestment, arguing the browser serves as a crucial gateway to the internet that brings in a third of all Google web searches.
Shares in Google-parent Alphabet have since skyrocketed by more than 20% following that decision. Judge Brinkema has said in pre-trial hearings that she will closely examine the outcome of the search trial when assessing her path forward in her own case. These cases are part of a broader bipartisan government campaign against the world’s largest technology companies. The U.S. currently has five pending antitrust cases against such companies
