The Justice Department announced on Monday its formal request for a judicial order to break up Google, citing the tech giant’s monopoly in advertising technology. This marks the beginning of a crucial hearing expected to significantly impact Google’s online power.
Earlier this year, Judge Leonie M. Brinkema of the U.S. District Court for the Eastern District of Virginia had already ruled that Google established a monopoly over the tools websites use to sell ad space. She further concluded that Google also monopolized the software facilitating connections between publishers and advertisers.
Monday’s proceedings saw Judge Brinkema commencing arguments from both the government and Google, focusing on the most effective remedies for the identified monopoly. Her final decision on these measures is anticipated in the coming months.
During her opening statement, Julia Tarver Wood, a lawyer for the Justice Department, advocated for Judge Brinkema to mandate the sale of Google’s ad exchange software, which links ad buyers and sellers. Additionally, the government seeks to open up the proprietary computer code behind the tools publishers use for ad space auctions.
“Nothing short of a structural divestment is sufficient to bring meaningful change,” Wood stated.
In response, Google’s legal team argued that the government’s proposals were excessively harsh. Karen Dunn, Google’s lawyer and a partner at Dunn Isaacson Rhee, proposed more moderate adjustments to the company’s advertising software, claiming these would still benefit publishers and address concerns.
Dunn emphasized that their proposed solutions were “tailored, as law requires, to technology in the case at hand and the complexity of the ad tech system.”
These arguments represent Google’s latest effort to avoid a breakup, which remains the most drastic judicial remedy for anti-competitive behavior. During a May hearing, Judge Brinkema indicated she was seriously considering forcing the company to divest parts of its advertising technology business.
Such a decision could profoundly alter Google’s trajectory. The company recently avoided a breakup in a separate case concerning its internet search monopoly. In that instance, the judge declined the government’s plea to sell off Google’s popular Chrome web browser. Instead, he ordered Google to share its search results with competitors and modify contracts that establish its search engine as the default on web browsers and smartphones.
Legal experts note that the influence of that previous ruling on Judge Brinkema’s current decision remains uncertain.
Bill Kovacic, a former chair of the Federal Trade Commission, commented that Judge Brinkema “could do something that was more aggressive.” He added, “At a minimum, whatever is going through her mind, she has the opportunity to do more.”
The outcomes of both cases will serve as a crucial indicator of whether government lawsuits can effectively challenge the pervasive influence of tech giants over commerce and communication. Another significant ruling is expected soon in an F.T.C. lawsuit against Meta, alleging that the company illegally stifled emerging competitors like Instagram and WhatsApp through acquisition.
Amazon and Apple are also currently facing antitrust lawsuits from the government.
The Monday hearing, projected to last between two and three weeks, originated from a 2023 government lawsuit against Google. The Justice Department contended that Google leveraged its control over ad technology to secure a disproportionately large share of ad sales, hindering fair market competition. These digital advertisements appear across various websites, such as news or recipe platforms, and are managed and sold via Google’s extensive system as web pages load.
At last year’s trial, the government presented evidence that Google’s ad-selling tools for publishers command an overwhelming 87 percent of the U.S. market.
The government’s lawsuit accused Google of monopolizing three distinct segments of the ad tech industry: the platforms publishers utilize to manage their ad inventory, the tools advertisers employ to bid for ad space, and the software, known as an ad exchange, that facilitates connections between both parties.
In April, Judge Brinkema found Google liable for breaking the law to protect its monopolies in both the publisher tools and the ad exchange. However, she concluded that the government failed to prove Google was a monopolist concerning the tools used by advertisers.
To address these violations, the Justice Department on Monday urged the judge to compel Google to sell its ad exchange.
During the opening arguments, Google’s lawyer, Ms. Dunn, characterized the government’s proposal as “radical and reckless” and “a swing for the fences.”
Google’s counter-proposal involved making its ad software more accessible to competitors, specifically by ensuring its ad exchange could interoperate with rival tools. The company also suggested modifications to ad auction rules that competitors had identified as giving Google an unfair advantage.
However, Ms. Tarver Wood, representing the Justice Department, dismissed Google’s proposed solutions as merely a “Band-Aid.”