Google is set to face a federal court test on Monday as US government lawyers seek to break up the company’s ad technology business. This is the second such test for Google this year, following a similar government demand to split up its empire that was rejected by a judge earlier this month.
The current lawsuit focuses on Google’s ad tech “stack,” which refers to the tools used by website publishers to sell ads and by advertisers to buy them. In a landmark decision earlier this year, Federal Judge Leonie Brinkema ruled that Google maintained an illegal grip on this market. The upcoming trial will determine the penalties and changes Google must implement to address its monopoly.
According to court filings, the US government will argue that Google should spin off its ad publisher and exchange operations. Additionally, the Department of Justice (DOJ) will request that Google be banned from operating an ad exchange for 10 years after the divestitures are complete. Google, on the other hand, will argue that the divestiture demands are excessive, technically unfeasible, and would harm the market and smaller businesses.
The company’s Vice President of Regulatory Affairs, Lee-Anne Mulholland, stated that the DOJ’s case “misunderstands how digital advertising works and ignores how the landscape has dramatically evolved, with increasing competition and new entrants.” This case is part of a broader bipartisan government campaign against large technology companies, with the US currently having five pending antitrust cases against such companies.
In a similar case in Europe, the European Commission fined Google 2.95 billion euros ($3.47 billion) over its control of the ad tech market and ordered behavioral changes. The US trial follows a first trial that found Google operated an illegal monopoly and is expected to last about a week, with closing arguments scheduled for a few weeks later.
The outcome of this case may have significant implications for Google’s business operations and the broader technology industry. As the US government continues to push for greater regulation of large tech companies, Google’s case is being closely watched by industry observers and regulators. The company’s shares have risen by over 20% since a separate judge rejected a government demand to divest its Chrome browser, indicating the potential impact of antitrust cases on tech companies’ stock performance.
