GOOGLE AD MONOPLY

GOOGLE OPERATING ADVERTISING MONOPOLY IN DIGITAL ECOSYSTEM

By PETER THOMAS BUSCH

Google LLC has so much money and so much ability to generate revenue that before the lights were turned on inside the courtroom, the defendant cut a check for $2.289 million plus as a way of making the demand for compensation no longer relevant.

The digital advertising world market is a 5 billion customer digital universe, in smart phone owners alone.

District Court Judge Leonie M. Brinkema was undaunted, though, by the monopolistic power of Google LLC in The United States of America, et al v. Google LLC, in the Eastern District of Virginia on April 17, 2025. 

The Federal Department of Justice was joined by 17 State Attorney Generals in making the claim against Google under Section 2 of the Sherman Act and Section 16 of the Clayton Act.

At issue was digital on-line display advertising revenue that had already surpassed broadcast television advertising revenue during 2016.

Brinkema acknowledged from the outset that advertising revenue has indirectly supported the growth of the digital universe, the ability to publish for free on-line and the ability to access free Internet content.

The court also stated that the gradual automation of on-line advertising has benefitted advertisers by enabling a more accurate targeting of audiences for the inventory the advertiser has on hand.

The digital advertising market has several components, including customer monitored advertiser ad servers and self-directed demand side advertising platforms.

In the middle of the advertising market are the ad exchanges that join sellers of inventory with internet publishers in a manner that optimizes advertising results.

Google was found to operate a monopoly in this on-line advertising ecosystem. 

A third stream of digital advertising occurs on websites that utilize self-owned and operated advertising tech tools.  These publishers that do not rely on Google ad tools include e-tech companies such as Amazon, Meta and CNN.

Brinkema also noted that the real value in a monopoly is the ownership of user data that is converted into advertising algorithms: the more users, the more data, the more advertisers.

Google purchased DoubleClick for $3.1 billion in 2008, partly to limit Microsoft’s competitiveness.

Google also purchased AdMeld in 2011. AdMeld was a go-between that helped advertisers choose ad spots. Google deconstructed the advertising tech company, absorbing two main parts into Google, and then deprecating the rest of the company, thereby eliminating a major competitor.

The court ruled that the acquisition of these companies per se did not amount to anti-competitive behaviour, but that the way the components of these companies were later used to develop more market power, and maintain the monopoly by preventing third party tech companies from entering the advertising market, was illegal.

Companies illegally function as monopolies when the company has monopoly power, and also take deliberate steps to maintain that monopoly power, either by manipulating the market, and/or preventing competition.

Google could be considered as a type of clearing house for digital advertisement products whose function is to find spots on websites for advertisers in competition with other clearing houses and their advertising clients. These clearing houses compete with each other for advertising space on websites through an automated bidding process.

On the advertising buying side of the exchange, Brinkema found that Google’s ad tool, AdX Last Look, would look at competitors’ bids for space and out-bid the market on behalf of Google advertisers. This advantage harmed publishers of the space as well as competing clearing houses and their individual advertisers.

On the selling side of the exchange, Google would adjust the cost to their advertisers based on competition, or otherwise increase revenue to Google by increasing costs to advertisers.

Google further manipulated the on-line advertising market with Project Poirot. Google would artificially decrease the cost to Google advertisers to win out against competing clearing houses, and then recoup lost revenue by artificially increasing costs to their advertisers when there was less competition.

Brinkema then found that Google maintained the monopoly against what competition exists by introducing Unified Pricing Rules that took control away from publishers of web space regarding pricing of advertising on their websites. 

Google used this added control to increase revenue to Google.

The court also found that Google protected the monopoly by developing incompatible technology to which competitors could not afford to adapt. The e-universe is considered a digital ecosystem in which incompatible technology eventually cannot survive.

Illegal monopoly power can be established directly and/or indirectly. An unusually high market share is just one factor. Taking purposeful steps to accumulate and maintain that power is a second factor.

Google controls 91% of the world-wide advertising server market and 86% in the USA.

Google maintains this monopoly in part because of the existing market barriers that prevent existing competitors from competing directly with Google, and that prevent new competitors from entering the market.

Operating a digital advertising clearing house is a resource intensive process that few companies can afford. Moreover, the lack of competition or effectiveness of a competitor, discourages customers from switching away from Google, even if the customers are aware of the monopoly and have become unsatisfied with the service that Google provides.   

This market control harms publishers and advertisers because the publishers do not receive the highest revenue for their web space, and advertisers do not pay the lowest price that an otherwise fair market would provide.

The court found that Google could artificially raise prices and customers would still not switch to a competitor.

Brinkema found that Google operates a sophisticated exclusionary campaign by tying together separate ad tools in a way that ensures customers would exclusively use Google.

In particular, the on-line auction for advertising space is controlled, because Google uses tech to gain an advantage in the bidding process that permanently downsizes existing competitors.

The Department of Justice (DOJ) also asked the court to draw an adverse inference from the destruction of evidence by Google that would otherwise have been discoverable for trial by the DOJ.

The DOJ alleged that Google had deleted internal communication between employees. The internal discussions would move from email exchanges to chats, if the subject was sensitive in nature. And these chats automatically deleted.

Brinkema ruled that because the court had sufficient evidence during the trial to find in favour of the DOJ, that the court did not have to make a ruling on the deleted internal chat messages between Google employees.