Google, US Government Face Off In Court Over Digital Ad Monopoly Remedies

Google and the U.S. Government return to federal court on Friday for a key hearing that will shape how the company’s ad business is regulated after a judge found parts of its digital advertising system to be an illegal monopoly earlier this year.

According to AP, the session in Alexandria, Virginia, marks the final stage of an 11-day remedy trial held this autumn, where U.S. District Judge Leonie Brinkema has been examining how to curb the anti-competitive conduct she concluded Google had deployed across sections of its ad technology. Brinkema ruled in April, after a lengthy trial last year, that components of Google’s ad stack had been rigged in ways that violated antitrust law.

Friday’s (21 November) closing arguments will give lawyers for Google and the U.S. Department of Justice their last opportunity to convince Brinkema before she decides what structural or behavioural measures to impose, a ruling expected early next year.

Reported AP, the Justice Department is urging Brinkema to order Google to sell parts of the ad technology system it has built over nearly two decades, arguing that “a recidivist monopolist” cannot be restrained without a breakup. Prosecutors pointed not only to Google’s conduct in the digital ad market but also to findings from the separate search monopoly case, where the government also sought divestiture. The judge in that matter declined to force a sale of the Chrome browser, a decision widely viewed as a limited penalty.

Google is still required to implement reforms in the search case, but AP reported that the verdict has largely been seen as a modest setback for the company. Alphabet’s market value rose by about $950 billion, nearly 37%, to almost $3.5 trillion after U.S. District Judge Amit Mehta’s ruling was released in early September.

Undeterred, the Justice Department is pressing for structural changes to the ad tech system, which processes roughly 55 million requests every second, according to Google’s own estimates in court filings. The sheer scale and complexity of the digital advertising machinery underpin Google’s argument that forced divestitures would introduce unacceptable risk.

“This is technology that absolutely has to keep working for consumers,” Google stated in filings ahead of the hearing, describing the government’s proposals as “legally unprecedented and unsupported divestitures.” The company argues that its own package of changes would provide greater price transparency and increase competition. It also cites rapid disruption in the market, driven by artificial intelligence, as a reason for caution, noting that Mehta, in the search case, reasoned that AI was already generating competitive pressure.

But government lawyers have urged Brinkema to concentrate on the testimony of industry witnesses who described how Google “can manipulate computer algorithms that are the engine of its monopolies in ways too difficult to detect.” They argue such evidence shows why voluntary reforms from the company are inadequate.

Brinkema’s decision on how to rein in Google’s advertising business will determine the government’s most significant attempt yet to alter the structure of the online ad market — and could shape the future of how digital advertising is bought and sold across the internet.

(With inputs from AP)