The New York Budgets

Tag: Google AdMob

  • Judge Determines That Google Is a Monopoly in Online Advertising

    Judge Determines That Google Is a Monopoly in Online Advertising

    Google has illegally built “monopoly power” with its web advertising business, a federal judge in Virginia has ruled, siding with the Justice Department in a landmark case against the tech giant that could reshape the basic economics of running a modern website.

    The ruling that Google violated antitrust law marks the US government’s second major court victory over Google in less than a year amid claims the company has illegally monopolized key parts of the internet ecosystem, including online search. And it is the third such decision since a federal jury in December 2023 found that Google’s proprietary app store is also an illegal monopoly.

    Taken together, the trio of decisions highlights the breadth of trouble Google faces, raising the prospect of sweeping penalties that could reshape multiple aspects of its business, though ongoing and expected appeals will likely take years to play out.

    Thursday’s decision by District Judge Leonie Brinkema, of the US District Court for the Eastern District of Virginia, addresses the $31 billion portion of Google’s ad business that matches website publishers with advertisers. This “stack” of technologies determines what banner ads appear on countless sites across the web.

    The Justice Department’s lawsuit followed years of criticism that Google’s extensive role in the digital ecosystem that enables advertisers to place ads, and for publishers to offer up digital ad space, represented a conflict of interest that Google exploited anticompetitively.

    Brinkema sided with the Justice Department’s argument that by tying its ad server and publisher ad exchange together, Google was able to “establish and protect its monopoly power in these two markets, she wrote in her 115-page decision.

    But she also struck down one of the government’s claims related to Google’s online advertiser ad networks.

    “We won half of this case and we will appeal the other half,” Google’s Vice President of Regulatory Affairs Lee-Anne Mulholland said in a statement following the decision.

    “The Court found that our advertiser tools and our acquisitions, such as DoubleClick, don’t harm competition,” Mullholland said. “We disagree with the Court’s decision regarding our publisher tools. Publishers have many options and they choose Google because our ad tech tools are simple, affordable and effective.”

    The Department of Justice did not immediately respond to requests for comment.

    Google had argued that the Justice Department’s argument is “flawed” and would “slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow,” according to a statement from a company spokesperson after the lawsuit was filed in 2023.

    However, Brinkema argued in her decision that Google’s practices have deprived “rivals of the ability to compete” and “substantially harmed Google’s publisher customers, the competitive process, and, ultimately, consumers of information on the open web.”

    The decision could force Google to divest part of its online ad business. But the fact that the government did not win on all of its claims makes that outcome less likely, said William Kovacic, global competition professor of law and policy at The George Washington University Law School.

    “The general idea in other antitrust cases is that the remedy has to be proportional,” Kovacic said. “The broader the finding of illegality, the deeper the finding of deliberateness… the greater the platform for a bolder remedy.”

    Still, he said, Google could get stuck with a conduct remedy — such as restrictions on how it can operate or price its services — “that would not be good for them.”

    Some tech critics and media organizations cheered the ruling.

    “For years, Google wielded unchecked monopoly power over the digital advertising market – using it to suffocate the media industry and force middleman taxes on everything we buy online,” said Sacha Haworth, executive director of the Tech Oversight Project, who called the decision an “unequivocal win for the American people.”

    Senator Elizabeth Warren said in a statement Thursday that the decision is “a big win in the fight to break up Big Tech … the result of years of work to rein in tech companies’ abuses.”

    The decision is part of a wider push by regulators to check the power of large tech companies including Apple, Meta and Amazon in addition to Google parent Alphabet. Just this week, Meta CEO Mark Zuckerberg took the stand in a trial over a blockbuster antitrust lawsuit in which the US Federal Trade Commission accused the social media giant of buying would-be competitors to stifle competition.

    Thursday’s decision, Kovacic said, could “lend impetus” to efforts around the world to crack down on Google and other tech giants and “give them confidence to push ahead.”

  • Google Sets a Precedent with Swift Antitrust Defeats

    Google Sets a Precedent with Swift Antitrust Defeats

    Silicon Valley’s tech giants have long regarded antitrust scrutiny as an irritating cost of doing business. There will be investigations, filings, depositions and even lawsuits.

    Yet courts move slowly, while technology rushes ahead. Time works to the companies’ advantage, as the political winds shift and presidential administrations change. That dynamic often opens the door to light-touch settlements.

    But the stakes rose sharply for Google on Thursday, when a federal judge ruled that the company had acted illegally to build a monopoly in some of its online advertising technology. In August, another federal judge found that Google had engaged in anticompetitive behavior to protect its monopoly in online search.

    Antitrust experts said two big antitrust wins for the government against a single company in such a short time appeared to have no precedent.

    “Two courts have reached similar conclusions in product markets that go to the heart of Google’s business,” said William Kovacic, a law professor at George Washington University and former chairman of the Federal Trade Commission. “That has to be seen as a real threat.”

    The Google decisions are part of a wave of current antitrust cases challenging the power of the biggest tech companies. This week, the trial began in a suit by the F.T.C. claiming that Meta, formerly Facebook, cemented an illegal monopoly in social media through its acquisitions of Instagram and WhatsApp.

    The government has also sued Apple and Amazon over allegations of anticompetitive behavior.

    And on Monday, the judge who ruled against Google in August will hear arguments on how to restore competition in the online search engine market. The Justice Department has asked the court to order Google to sell Chrome, its popular web browser, and either spin off Android, its smartphone operating system, or be barred from making its services mandatory on its phones.

    Google has described the government’s request as a “wildly overboard proposal” that “goes miles beyond the court’s decision.” The company suggested that it should change very little.

    In the ad technology case, the judge gave both sides seven days to propose a schedule for the next phase of the case, which will also involve remedies. The government is likely to ask Google to sell some of its ad tools, the antitrust experts said.

    Antitrust enforcement has taken an activist turn in recent years, as both the Trump and Biden administrations increased their scrutiny of the biggest tech companies. But filing cases by no means guarantees success.

    The triumphs by the government in both Google cases, the experts said, signal that the courts are finally grappling with anticompetitive behavior in digital markets. For years, enforcement lagged technology’s explosive growth, in part because antitrust law typically focuses on rising prices for consumers. Many internet services are free.

    The Justice Department’s wins against Google are “important affirmations of the ability of the government to pursue major monopolization cases and prevail — something there has been doubt about,” said Nancy Rose, an economist who is an antitrust expert at the Massachusetts Institute of Technology.

    The goal of an antitrust remedy is to free up markets, creating a competitive environment that results in more new ideas, new companies, more innovation and lower prices.

    The courts have long been reluctant to engage in the drastic surgery of a breakup. In the last major antitrust case against a tech company, the government reached a settlement with Microsoft in 2001, shortly after the George W. Bush administration assumed office. The agreement loosened up Microsoft’s contracts on personal computer software, which a court found to be anticompetitive, but left the company intact.

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    Google’s Android mascot at a trade show in Las Vegas. Divesting Android, the smartphone operating system, is one of the antitrust remedies that the Justice Department has proposed.  Credit…Steve Marcus/Reuters

    While the judges in the Google case will weigh breakup options again, the prospects are uncertain. Shifts in the political climate could also influence the outcome for Google, as they did for Microsoft.

    So far, aggressive antitrust enforcement has had bipartisan support. The Google search case was filed in the waning days of the first Trump administration, and the ad technology case by the Biden administration.

    “It’s pretty amazing when you look at the cases filed, the progress so far, and that the government enforcers seem consistently serious,” said Harry First, an antitrust expert at the New York University School of Law. “Maybe the tortoise is going to win here.”

    Still, the Google rulings are early steps in an uncertain judicial process.

    Google will appeal both, and has expressed confidence that it will ultimately prevail. The company contends that its strong market position in search and ad technology is the result of innovation and investment — superior products that consumers value — and not because of anticompetitive tactics.

    Either or both of the Google cases may land before the Supreme Court, the experts said. Or the Trump administration could settle them.

    “Trump is a deal maker, and that could be where this is headed,” said Herbert Hovenkamp, a professor at the University of Pennsylvania’s Carey Law School.