A U.S. federal court has ruled that Google will not have to break up its advertising business, despite the company being declared a monopolist in April. Judge Leonie Brinkema rejected the Department of Justice’s demand to sell the AdX ad exchange and, potentially, the DFP ad server, both part of Google Ad Manager (GAM). This decision calls into question the ability of regulators to rein in giants like Google.
Why did Google avoid a breakup of its advertising empire?
Judge Brinkema found that a forced breakup of Google’s business could cause more harm to publishers than current anti-competitive practices. She pointed to potential negative consequences for small publishers who use DFP for free. Additionally, the acquisition of AdX by another party (e.g., Microsoft) could create new complexities.
Google’s proposed measures and their impact
Google had previously proposed a number of measures to enhance competition:
- Providing competitors with real-time bid data for display advertising sold through AdX.
- Abolishing “Unified Pricing Rules” and allowing publishers to set different minimum prices for individual bidders in GAM.
- Refraining from using “first-look” and “last-look” privileges to adjust its bids. Google claims it stopped this practice several years ago.
“What is a web publisher to do if they want to use a different ad server but still get demand from Google buyers?” asks Jay Friedman, co-founder of CartographAI and former CEO of Goodway Group.
Market and expert reaction to the court’s decision
While many Google critics are disappointed, some ad industry players are willing to see how the proposed measures will play out. For example, PubMatic, an AdX competitor, stated: “We expect the court’s adoption of behavioral remedies to create a level playing field for all market participants. The court’s focus on behavioral remedies will likely provide a faster path to addressing the current competitive harm from Google’s unlawful monopoly.”
Behavioral remedies versus full divestiture: arguments from both sides
The Department of Justice insisted that forced divestiture would be a “cleaner and less risky solution,” expressing distrust in Google’s ability to comply with prescribed behavioral measures. However, Google’s lawyers countered that “distrust is not a lever to circumvent established antitrust principles.”
Previous rulings and the future of Big Tech regulation
This is not the first time Google has been found to be a monopolist but avoided a breakup. In August 2024, Judge Amit Mehta found Google’s monopoly in online search but did not force the sale of Chrome or Android. Instead, Google was ordered to share search data with competitors.
Such decisions make ad industry insiders doubt the ability of regulators to deal with Big Tech. One former media buyer anonymously remarked that even “trust-buster” Theodore Roosevelt would be astonished by the lack of courage in the judiciary today.
Frequently Asked Questions
What is Google Ad Manager (GAM)?
Google Ad Manager (GAM) is an integrated ad management platform that combines the AdX ad exchange and the DFP ad server. It allows publishers to sell ad space and advertisers to buy it.
Why did the U.S. Department of Justice want to break up Google?
The U.S. Department of Justice accused Google of monopolizing the ad tech market and insisted on breaking up the company to restore competition and prevent anti-competitive practices.
What behavioral measures did Google agree to take?
Google agreed to a number of measures, including providing bid data to competitors, abolishing “Unified Pricing Rules” for publishers, and refraining from “first-look” and “last-look” privileges in bidding.
Conclusion: pennies for a million or millions for pennies?
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