Google Is Found Guilty Of Operating An Ad Tech Monopoly (!)

Serious news headlines don’t typically include exclamation marks, but this isn’t just any news story.

On Thursday morning, US District Court Judge Leonie Brinkema published her long-awaited ruling in US v. Google, finding Google guilty of having monopolized two online advertising markets.

According to Judge Brinkema, Google violated Section 2 of the Sherman Act by “willfully acquiring and maintaining monopoly power in the open web display publisher ad server market and the open-web display ad exchange market.”

She also determined that Google unlawfully tied its publisher ad server (DFP) with its ad exchange (AdX).

Judge Brinkema wasn’t convinced, however, by the government’s argument that there is a relevant market for open web display advertiser ad networks. Can’t win ’em all.

Read the full decision here.

… to those who wait

The ad tech industry had been waiting with bated breath (and some consternation at this point) for a decision from Judge Brinkema.

It’s been nearly five months since closing arguments were delivered in late November right before Thanksgiving. The trial itself took place over three rapid-fire weeks of testimony in September, with the expectation that there would be a ruling by early this year.

But then: crickets.

Speculation swirled that the newly installed Trump administration might interfere in some way in Google’s favor, considering how the tech industry cozied up to the new president in the lead-up to his inauguration.

But Trump’s DOJ has publicly reaffirmed its commitment to an aggressive antitrust stance regarding Big Tech in general and Google in particular.

Now that there’s a verdict in the ad tech case, the US District Court for the Eastern District of Virginia will set a briefing schedule and hearing date to determine the appropriate remedies “for these antitrust violations.”

Skating on spoliation

The Department of Justice is calling for both structural and behavioral remedies, including a potential forced divestiture of Google’s ad tech assets and a ban on Google self-preferencing its own ad products and services.

In other words, pop your popcorn.

But on the issue of spoliation, Google skates.

The government had also requested that the court sanction Google for spoliation, which is the act of destroying or otherwise suppressing evidence or failing to take reasonable steps to preserve it. The DOJ wasn’t amused either by Google’s practice of labeling routine emails and other documents as “attorney-client privileged,” allegedly as a way to shield nonconfidential information from exposure during litigation.

Judge Brinkema agreed in her ruling that “Google’s systemic disregard of the evidentiary rules regarding spoliation of evidence and its misuse may well be sanctionable.”

But she – like Judge Amit Mehta in his search antitrust ruling against Google last year – decided not to go so far as to sanction Google or assume “adverse inference,” which is a legal principle whereby a court assumes that any evidence that is not presented by a party is unfavorable to that party.

Why no sanctions? Because there’s no point, essentially. There was already enough evidence for her to find Google guilty of operating monopolies in two online ad markets.

Still, she wrote, “as in Google Search, the Court’s decision not to sanction ‘should not be understood as condoning Google’s failure to preserve chat evidence.’”

Publisher vindication

But Judge Brinkema did not mince words regarding Google’s behavior in the conclusion of her ruling.

“For over a decade,” she wrote, “Google has tied its publisher ad server and ad exchange together through contractual policies and technological integration, which enabled the company to establish and protect its monopoly power in these two markets.”

Because, as she notes, being a monopolist isn’t just about establishing dominance; it’s about taking actions to maintain it.

“Google further entrenched its monopoly power by imposing anticompetitive policies on its customers and eliminating desirable features,” she continued. “In addition to depriving rivals of the ability to compete, this exclusionary conduct substantially harmed Google’s publisher customers, the competitive process, and ultimately, consumers of information on the open web.”

🎤⬇ (There’s no official “mic drop” emoji, unfortunately.)

Google will, of course, challenge the ruling, according to Lee-Anne Mulholland, Google’s VP of regulatory affairs, who said in a statement: “We won half of this case and we will appeal the other half.”

“The Court found that our advertiser tools and our acquisitions, such as DoubleClick, don’t harm competition,” Mulholland stated. “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.”

In other Google antitrust news, the remedy phase for the search case begins on Monday in Washington, DC. Last year, Google was found guilty of operating a monopoly over the internet search market and the search text advertising market. Its punishment in that case will be decided over the next few weeks.

In the meantime, and as we wait for next steps in US v. Google (ad tech edition), read on for our detailed coverage of the first week of the ad tech trial and closing arguments: