In a pivotal moment for the digital advertising landscape, the nation waits for a potentially web-shattering decision in U.S. v. Google, redux. The U.S. government filed a significant antitrust lawsuit against Google in 2023, alleging that the company has monopolized the digital advertising market, stifling competition and harming both businesses and consumers in the process. Not to be confused with the landmark decision in U.S. v. Google (2020) involving Google search, this impending decision against Google on digital advertising could have groundbreaking implications for the digital landscape – and your wallet.
Public Knowledge has extensively covered the Google search case, which already made waves as the most consequential antitrust case since U.S. v. Microsoft was settled in 2001. But the recent search case decision should not eclipse these allegations of Google’s dominance in digital advertising – rather, both cases complement each other and demonstrate how Google behaved anticompetitively.
The Core Allegations in the Ad Tech Case
The opening and closing arguments presented by the U.S. Department of Justice (DOJ) were clear and forceful. The government argues that Google has built an overwhelming monopoly in the digital advertising space, controlling a significant share of both the supply and demand sides. The trial evidence showed that Google prioritizes maintaining its monopolies over serving its publisher and advertiser customers or competing fairly. In the ad tech market, Google controls several critical tools: the leading publisher ad server; the top advertiser ad network; and the dominant ad exchange. This dominance allows Google to dictate terms, stifling competition and innovation. The DOJ contends that Google’s practices, such as prioritizing its own ad services and making it difficult for competitors to reach consumers, have created an uneven playing field that benefits Google at the expense of the market – and all of us.
Google’s Defense
In regard to market definition, Google argued that the market should be defined more broadly than DOJ’s focus on the specific ad tech tools listed above. Instead, Google proposed that the entire digital advertising ecosystem – including search ads, social media ads, and e-commerce – be considered as one interconnected market. This broader definition, Google argued, better reflects how advertisers and publishers interact across platforms and how competition functions across the entire ad tech landscape. Overall, Google’s legal team argued that its dominance comes from offering better products and services. They claimed that consumers benefit because Google’s tools make online ads more efficient and relevant. They also highlighted other big competitors like Facebook and Amazon to show that competition in the ad space is still strong.
However, Google’s defense here is deeply flawed. By including search ads, social media ads, and e-commerce in the same market, Google shifts attention away from its strong hold on search and display advertising. Although these advertising tools may be connected in some ways, they serve different needs and target different audiences. For example, search ads on Google are quite different from Facebook’s social media ads or Amazon’s e-commerce ads, so grouping them together ignores the unique competition in each area. Additionally, pointing to competitors like Facebook and Amazon doesn’t necessarily show that competition is strong across the entire advertising space. These companies operate in different niches—social media and e-commerce—and their success doesn’t diminish Google’s control over search advertising or its potential to engage in anti-competitive behavior. Overall, Google’s broad market definition downplays its market power, ignores important differences between competitors, and doesn’t fully address the long-term anti-competitive effects.
Consumer Impact
This case could dramatically improve how consumers engage with online platforms, as almost all of them display digital ads. Digital advertising might seem like something far removed from our everyday lives, but it actually has a huge impact on what we see online, how we engage with content, and even how much we pay for products. By addressing Google’s digital advertising trifecta, the ad tech case has the potential to lower barriers to entry in digital advertising so smaller entities can participate. The implications of this case reach far beyond the courtroom – what happens here could foster competition and innovation throughout the entire online ecosystem.
The Search and Ad Tech Cases Can be Mutually Reinforcing
The courts have already established Google’s liability in the search engine market and are now considering what remedies are appropriate. Meanwhile, the ad tech case is still being decided – closing arguments wrapped up in late November. While the two cases are in different stages and focus on different aspects of Google’s business – one on search and search-related advertising, and the other on Google’s dominance in the broader digital advertising technology stack – there are several points of intersection where the remedies could reinforce each other, further breaking down Google’s anticompetitive power.
For example, in the search case, the DOJ proposes structural remedies, such as separating Google’s search business from its other operations (e.g., Chrome or Android), to reduce its market power and prevent the unfair promotion of its ad products. In the ad tech case, Judge Leonie Brinkema might require Google to divest its ad tech assets, like Google Ad Manager or DoubleClick, to eliminate conflicts of interest where it prioritizes its own ads or data in auctions. Together, breaking up Google’s search and digital ad tech units could prevent the company from using its search data to dominate ad tech, while also preventing it from leveraging its ad tech tools to unfairly promote its search services, creating a more competitive ecosystem in both areas. This would promote fairer competition in ad tech, complementing existing efforts to reduce Google’s control over its search results and text ads.
In the ad tech case, Judge Brinkema could rule that Google must provide equal access to its advertising platform, allowing competitors to participate in Google’s Ad Exchange on an even playing field. This might include opening its auction mechanisms and ensuring third-party ad tech firms aren’t unfairly disadvantaged. Similarly, the DOJ proposed that Google should be prohibited from favoring its own search results or text ads, ensuring fair treatment for competitors. Together, these measures could promote a more competitive environment by preventing Google from discriminating in both search rankings and advertising auctions, giving competitors like Microsoft Bing and third-party websites better opportunities to compete for ad dollars.
Looking Ahead
These potential remedies could not only be extremely effective, but also make the need for sector-specific regulation of digital platforms all the more real. There are several other pending big tech antitrust cases with similar or related claims that make clear that the concentration of power among just a few digital platforms raises broader concerns about fair and healthy competition in tech. Take the earlier remedy of structural separation – this serves as a solution for conflicts of interests (such as operating in both the buy and sell side of a single platform) that favors the big players over the little ones. As tech conglomerates own product lines all over the tech stack, conflicts are rampant within the industry and must be addressed. Related to this, much like how a prohibition from Google favoring its own results or ads over competitors would foster healthier competition, anti-discrimination and self-preferencing regulation for digital platforms would break down barriers to entry for small competitors industry-wide.
But litigation takes years, and the judiciary lacks the capacity to enforce regulations and standards for industries that don’t have their constant attention. A digital regulatory agency is necessary to streamline enforcement, improve market oversight, and protect both competition and consumers in a rapidly changing technological landscape.
With closing arguments in the ad tech case now over, we’re left waiting for Judge Brinkema’s decision. A decision in favor of the government in this case would allow both current Google cases to reinforce each other by curbing Google’s ability to use its control over search and advertising to stifle competition, promoting a healthier and more dynamic digital economy. Whatever the outcome, this Google case could change the way digital advertising works for years to come and set the stage for how we handle competition and consumer rights in an evermore digital world.