US prosecutors ask judge to order spin-off of Google ad businesses
Request kicks off second phase of landmark antitrust trial after prior finding that tech giant ‘wilfully’ monopolised market
The US justice department’s long-running effort to snap Google’s dominance over digital advertising entered its end stage on Monday, as prosecutors asked a federal judge to break up the tech giant.
Federal prosecutors requested Google parent Alphabet be ordered to spin off the biggest exchange on which businesses bid for ads, and implement a phased divestiture of the technology online publishers use to sell ad space.
Gail Slater, the justice department’s antitrust chief, who was in court on Monday, said in a post on X: “We are putting our words into action as we take on Big Tech and Big Law to free up competition for open web advertising.”
The request kicked off the second phase of a landmark antitrust trial, after Leonie Brinkema, the district judge presiding over the case in Virginia, ruled in April that Google had “wilfully” monopolised those parts of the digital advertising market.
“For over a decade, 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,” Brinkema wrote in April.
The outcome of the trial’s so-called remedies phase is critical for Google, which relies on the more than $50bn in quarterly search-related advertising revenue to finance the rest of its empire, from its DeepMind artificial intelligence lab to Waymo self-driving taxis.
Karen Dunn, a lawyer representing Google, described the Department of Justice’s proposed remedies as a “dramatic over-reach” that would be “unwise, uncertain, unprecedented” and would harm consumers.
Google is battling a separate antitrust lawsuit by the department against its search arm. While the judge in that case, Amit Mehta of Washington DC federal court, also found the company guilty of monopolistic behaviour — by paying Apple and others billions of dollars to be their default search provider — he rejected prosecutors’ request that Google be forced to sell its Chrome browser.
Instead, he banned exclusive distribution contracts and ordered Google to share more data with rivals in the hope they could develop more compelling search engines to chip away at its almost 90 per cent market share. Avoiding a forced break-up was seen as a big win for Google, and its shares rallied following the decision.
Julia Tarver Wood, a DoJ lawyer, on Monday told Brinkema that the ad exchange market was “broken”, with excessively high prices, stifled competition and customers who were “locked in”.
Google has offered “behavioural” remedies as an alternative to a forced divestiture, including sharing its advertising exchange’s bid data with competitors.
Google’s proposal would “help our rivals compete, generate revenue and scale”, Dunn said.
She also raised the question of AI, arguing that more advanced technology in just a few years could scupper the DoJ’s decade-long remedy proposal.
But Grant Whitmore, an executive at advertising publisher Advance Local and the DoJ’s first witness, testified that AI would not necessarily resolve Google’s anti-competitive conduct.
He said behavioural remedies would be insufficient — and that he was forced to use Google’s other products in order to access advertising demand, a system he described as “opaque” and a “black box”.
“Google has had outsized market power due to its strength across every single aspect of digital [advertising] monetisation,” Whitmore said.