Decoding what Google's adtech monopoly ruling could mean for digital advertising

After a two-year legal battle between the tech giant and the U.S. Department of Justice alongside eight states, federal judge Leonie M. Brinkema has ruled that Google violated antitrust laws by "willfully acquiring and maintaining monopoly power" in the advertising technology market, potentially reshaping the $600 billion digital advertising landscape. 

The core of the case centered on the company's dominance in digital advertising technology, specifically the tools that publishers use to sell ad space and that advertisers use to buy it. Judge Brinkema found that Google violated the Sherman Act by monopolising and unlawfully tying two critical parts of the adtech stack together, including DoubleClick for Publishers (DFP) and AdX.

However, the ruling wasn't a complete victory for the DOJ. The judge rejected claims that Google monopolised the open-web display advertiser ad networks market. These networks help advertisers buy display ads across the open web outside of closed ecosystems like Facebook, Instagram and Google Search.

The trial's key revelations

The three-week trial, which began in September 2024 and ended in November 2024, revealed several troubling practices including:

Project Poirot and Jedi Blue: Evidence showed Google manipulating auction outcomes through secret projects.

Bundling Tactics: The DOJ highlighted how Google bundled its products to lock publishers into its ecosystem, making competition nearly impossible.

High Take Rates: Internal emails revealed Google's strategy to maintain high take rates (around 20%) on AdX despite competition.

Blocking Header Bidding: Testimony described Google's efforts to block header bidding practices, which publishers had been using to escape Google's grip.

Competitor Testimony: PubMatic CEO Rajeev Goel testified about Google's refusal to integrate PubMatic's API, preventing competitors from growing.

How Google built its adtech empire

Google's dominance in the adtech space wasn't accidental. The DOJ argued that the company's monopoly was built through strategic acquisitions, beginning with DoubleClick in 2008, which became the backbone of its ad business. This was followed by the purchase of AdMeld in 2011, which expanded the company's control over the ad market's supply side.

During the trial, former Google VP Brad Bender testified about the company's strategy to dominate the display ad market post-DoubleClick acquisition, reportedly with the intent of ‘crushing’ competition. Internal communications revealed how AdX became the default exchange in Google's ecosystem, effectively locking publishers in and stifling competition.

Evidence presented in court highlighted Google's attempts to block practices like header bidding, which publishers had used to circumvent Google's control. Tim Wolfe of Gannett testified that Google took over 50% of Gannett's programmatic ad revenue, while implementing header bidding led to a 15-20% CPM increase for the publisher.

The ruling and its implications

Judge Brinkema's ruling focused specifically on Google's publisher-side adtech tools. The court found that Google had unlawfully tied its publisher ad server (DFP) and ad exchange (AdX) together, forcing publishers to use both tools rather than mixing and matching with competitors' offerings.

The judge noted evidence destruction, noting that Google's document retention policies were "not the way in which a responsible corporate entity should function."

Google has already announced it will appeal the portion of the ruling that found its publisher tools violated antitrust laws. "We won half of this case and we will appeal the other half," said Lee-Anne Mulholland, Google's vice president of regulatory affairs. "The Court found that our advertiser tools and our acquisitions, such as DoubleClick, don't harm competition. We disagree with the Court's decision regarding our publisher tools."

It's important to note that this case specifically addresses Google's adtech business, not its dominant search business. According to reports, advertising accounted for approximately 75% of Alphabet's $350 billion revenue in 2024, but the Google Network business (which includes the adtech components in question) represented only 8.7% of that revenue.

The Ad Manager division that could potentially be divested represented just 4.1% of overall revenue and 1.5% of operating profit in 2020, according to Wedbush research cited in court documents.

There is a separate antitrust case regarding Google's search monopoly, which could potentially have even more significant implications for the company.

Potential remedies and industry impact

The court will soon set a briefing schedule and hearing date to determine appropriate remedies. These could include:

Structural Remedies: Forcing Google to break up its advertising business by selling Google Ad Manager (including AdX and DFP).

Behavioural Remedies: Allowing Google to keep its business intact but imposing restrictions to ensure fair competition, such as prohibiting Google from prioritising its own exchange or demand in auctions.

Karan Taurani, Senior Vice President - Research Analyst (Media, Consumer Discretionary & Internet), Elara Securities, notes that concrete action against Google may augur well for other ad tech players over the long term. He continues, "Any verdict constraining Google's tool use for publishers or reducing their monopolistic approach will be a key positive for other ad tech players like Affle."

However, Taurani raises an important question: "Whether other ad tech players are equipped to handle the scale and operational demands that Google currently manages."

The impact on the journalism industry could be particularly significant. Publishers have long fought against Google's dominance, claiming it has siphoned billions in potential revenue from news outlets. Witnesses from several news organisations testified that Google's exorbitant rates and surveillance methods that allow targeting high-value readers on cheaper sites have severely damaged the publishing industry's economics, according to reports.

The remedies phase of the trial will determine how significantly Google's business model will be affected. The company's plans to appeal could drag the process out for years.

In the meantime, the ruling sets an important precedent in the growing regulatory scrutiny of tech giants. Both the Biden and Trump administrations supported this case, showing rare agreement on Big Tech regulation.

For publishers, advertisers and competing adtech companies, the ruling offers hope for a more competitive digital advertising landscape. As the DOJ remarked during closing arguments, "Google is once, twice, three times a monopolist." Breaking or even loosening that monopolistic grip could return billions to the wider digital ecosystem and potentially help revitalise struggling industries like journalism that have been financially devastated by the current system.

However, this ruling marks just one chapter in the ongoing reconsideration of the power dynamics in digital advertising and the internet economy.

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