Antitrust: Court finds that Google maintains online advertising monopoly

Following a three-week trial, the court found that Google has violated Section 2 of the Sherman Act by willfully acquiring and maintaining monopoly power in the open-web display publisher ad server market and the open-web display ad exchange market, and has unlawfully tied its publisher ad server and ad exchange in violation of Sections 1 and 2 of the Sherman Act.

Background

The federal government and 17 states brought this antitrust action against Google LLC, claiming that it has monopolized three digital advertising technology markets in violation of Section 2 of the Sherman Act, and has tied its products in these markets together in violation of Sections 1 and 2 of the Sherman Act. The evidence presented during the three-week trial included testimony of 39 live witnesses, deposition excerpts from an additional 20 witnesses and hundreds of exhibits. Based on this evidence, the court makes the following findings of fact and conclusions of law.

Relevant market

Because the scope of the relevant market is central to this litigation, the court’s analysis of Plaintiffs’ claims starts “with a preliminary inquiry into market definition, which serves as a tool to determine the defendant’s market power.”

The court finds that publisher ad servers for open-web display advertising constitute a distinct relevant product market. The court also finds that ad exchanges for open-web display advertising constitute a distinct relevant product market. However plaintiffs have failed to show that advertiser ad networks for open-web display advertising constitute a relevant product market.

Google claims that the digital ad tech ecosystem constitutes a single two-sided market. The court finds this argument unpersuasive. Distinct products should not be grouped into a single omnibus market simply because they work together to achieve the same overarching purpose. Although Google correctly argues that, under Ohio v. Am. Express Co., 585 U.S. 529 (2018), both sides of a two-sided transaction platform should be considered in defining a market, many of the ad tech products at issue in this trial do not fit within Amex‘s definition of two-sided transaction platforms.

Defining an omnibus market to include buy-side tools built for advertisers that compete with other buy-side tools built for advertisers—and sell-side tools built for publishers that compete with other sell-side tools built for publishers—would ignore commercial realities and contradict the bedrock principle of antitrust law that any Sherman Act inquiry must focus on the protection of competition, not competitors. Because plaintiffs have shown that there are two relevant product markets, one for publisher ad servers for open-web display advertising and another for ad exchanges for open-web display advertising, the geographic scope of these markets must be determined.

Geographic scope

The court finds that the worldwide market as defined by Dr. Lee is the relevant geographic market for both the open-web display publisher ad server market and open-web display ad exchange market. The globally networked nature of the Internet has resulted in worldwide competition among ad tech providers, with the speed of light serving as a primary impediment to intercontinental ad serving. Many U.S.-based advertisers target international Internet users, and many international advertisers target U.S.-based users, including by advertising on U.S.-based publishers’ webpages.

Monopoly power

Plaintiffs have proven that Google possesses monopoly power in the publisher ad server for open-web display advertising market and in the ad exchange for open-web display advertising market. Having found that Google has monopoly power in two relevant markets within the open-web display advertising ecosystem, the next issue is whether Google willfully acquired and maintained this monopoly power.

Google’s monopolies in the publisher ad server and ad exchange markets, enhanced by the AdX-DFP tie, have enabled Google to introduce a series of anticompetitive policies, practices and technology changes to its sell-side ad tech tools that were not in its publisher customers’ best interests. These changes decreased product quality and harmed competition by further entrenching Google as the dominant company in open-web display advertising.

Google made these changes, despite customer complaints, by exploiting its durable monopoly power in the open-web display ad exchange and publisher ad server markets. The changes are further evidence that Google has engaged in “anticompetitive conduct” by its “willful acquisition or maintenance of [monopoly] power.”

The court finds that the refusal to deal doctrine articulated in Verizon Commc’ns Inc. v. Law Offs. of Curtis V. Trinko, LLP, 540 U.S. 398 (2004), does not protect Google from antitrust liability in this civil action. Further, Google has failed to proffer a sufficient procompetitive justification for its AdX-DFP tie, as each procompetitive benefit it alleged was either invalid or significantly outweighed by the tie’s anticompetitive effects.

Sanctions

Google’s systemic disregard of the evidentiary rules regarding spoliation of evidence and its misuse of the attorney-client privilege may well be sanctionable. But because the court has found Google liable under Sections 1 and 2 of the Sherman Act based on trial testimony and admitted evidence, including those Google documents that were preserved, it need not adopt an adverse inference or otherwise sanction Google for spoilation at this juncture.

Conclusion

Plaintiffs have failed to prove that there is a relevant market for open-web display advertiser ad networks, but have proven that Google has violated Section 2 of the Sherman Act by willfully acquiring and maintaining monopoly power in the open-web display publisher ad server market and the open-web display ad exchange market, and has unlawfully tied its publisher ad server and ad exchange in violation of Sections 1 and 2 of the Sherman Act. The court will set a briefing schedule and hearing date to determine the appropriate remedies for these antitrust violations.

So ordered.

United States of America v. Google LLC, Case No. 1:23-cv-108, Apr. 17, 2025. EDVA at Alexandria (Brinkema). VLW 025-3-171. 115 pp.