Google’s Ad Monopoly Ruled Illegal: What the Landmark Antitrust Decision Means

In an antitrust ruling that couldn't be much clearer or more direct, a US federal court has found Google guilty of maintaining an illegal monopoly over digital advertising technology. This case, brought by the US Department of Justice in 2023, focused very closely on how Google has bundled, how it has integrated, its various ad tech products, most notably Google Ad Manager, a program that serves ads to places on the web where humans might look and Google AdX (Ad Exchange), the part of the system that holds a kind of auction to determine which ad gets served where, right at the moment when a human's about to click something.

Judge Leonie Brinkema's 115-page decision sets out, in clear and compelling fashion, not just the essential facts of the case and Google's various evasions and justifications, but also the core problem raised by all this: what kind of competitive landscape Google is using its ad tech to create.

This ruling extends well beyond the company’s search engine supremacy. It cuts to the core of Google’s revenue model. Unlike some past critiques of Google’s search algorithms or concerns over users’ privacy, this case takes aim at the very structure of the company’s digital ad business. And what’s really at play here could have wide-ranging effects not just on Google but on the entire online publishing and ad world.

How Google Built Its Adtech Empire

The intricate, tightly integrated ad tech stack at Google is at the center of this case. The company started to dominate the advertising pipeline when it made two key acquisitions: DoubleClick in 2008 and AdMeld in 2011. These moves gave Google control of the tools on both sides of the digital advertising equation, publishers and advertisers.

Advertising servers such as DFP allowed websites to sell their ad spaces, whereas Google’s exchange platform AdX facilitated real-time bidding. On the demand side, big brands were served by the DoubleClick Bid Manager (now DV360). Even in its previous incarnation, DoubleClick was an advertising behemoth, and from these interconnected tools, Google created not just an efficient ad system, but also, according to the court, a strategically exclusionary one.

The court found that Google's configuration made it hard for rivals to get a foothold. High switching costs and Google's control over crucial components, such as pricing mechanisms and ad placement decisions, effectively locked publishers into Google's ecosystem.

Why the Court Ruled It a Monopoly

The court decided that Google was a monopolist in ad servers and the ad server market, having a market share of consistently 84 to 90 percent, that was protected by high barriers to entry. Even competitors as potent as Meta could not challenge Google’s scale and network effects. Fixed for a long time at 20 percent, the Google tax on ad server transactions through Google’s ad exchange, AdX, didn’t change even after AdX started performing relatively worse than the ad servers of Google’s competitors.

Proof also showed that Google connected its ad server (DFP) to its ad exchange (AdX) in ways that greatly reduced competition. By making access to real-time bids contingent on using its server, Google restricted the options of publishers and slowed down the rival ad exchanges, preventing them from competing on equal ground.