The U.S. Justice Department has formally requested that Google be compelled to divest two of its significant digital advertising businesses, following a recent federal court ruling that deemed the tech giant's operations as an illegal monopoly. This assertion was highlighted in a court filing submitted late Monday in Virginia, where the DOJ argued that Google should expedite the sale of its Ad Exchange, commonly referred to as AdX. This in-house ad marketplace plays a crucial role in linking advertisers with publishers.
In addition to the sale of AdX, the DOJ is advocating for a “phased divestiture” of Google's DFP publisher ad server. This vital tool is utilized by various websites to manage and store their digital ad inventory. The DOJ contends that these measures are essential to dismantle Google's monopolistic hold on the market and to foster competition within the ad exchange and publisher ad server sectors. The filing emphasizes that the divestiture process should be overseen by a court-appointed official, ensuring that the DOJ retains the authority to approve or reject any potential buyers.
The comprehensive proposal aims to put an end to Google's monopolistic practices, restore competition in the marketplace, and prevent future violations. U.S. District Judge Leonie Brinkema has scheduled a trial date for September 22 to discuss these remedies, following her ruling last month that Google's monopolies have "substantially harmed" customers. During a recent hearing, DOJ attorneys indicated their intention to pursue a breakup of Google's digital advertising operations, with federal attorney Julia Tarver Wood noting that such a forced sale may take several years to finalize.
Furthermore, the DOJ is demanding that Google modify its operational practices. This includes opening its other ad products to compatibility with third-party tools under non-discriminatory conditions regarding bidding, matching, ad placement, and the provision of information, unless explicitly instructed by an advertiser. Ultimately, the judge holds the authority to determine the necessary steps Google must take to rectify its illegal conduct.
A breakup of Google’s digital advertising business could significantly disrupt its most profitable segment. Alphabet, Google's parent company, reported approximately $350 billion in revenue for fiscal 2024, largely attributed to its dominance in digital advertising. In light of these developments, Google has announced plans to appeal the Justice Department's case, asserting that the proposed remedies are excessively harsh. Company representatives argue that a forced sale may not even comply with existing legal frameworks.
Lee-Anne Mulholland, Google’s vice president of regulatory affairs, voiced concerns in a recent blog post, stating that the DOJ's push for a divestiture of Google Ad Manager could jeopardize a critical tool that advertisers rely on to connect with publishers and reach their target audiences effectively. Mulholland further noted that app and video publishers depend on this tool to monetize their content.
In addition to the current case, Google is facing potential divestiture in another ongoing DOJ lawsuit. U.S. District Judge Amit Mehta has ruled that Google maintains an illegal monopoly over online search, and the DOJ is urging him to compel the sale of Google's Chrome web browser while also requiring the company to share data with competitors. A decision from Judge Mehta on this matter is anticipated by August.
