Google Faces Court Battle Over Ad Tech Business Breakup

Google is confronting a fresh federal court challenge on Monday, as US government lawyers request a judge to order the breakup of the search engine giant’s advertising technology business.

This marks Google’s second major legal test this year, following a previous attempt in which a similar government demand to dismantle its empire was rejected by a judge earlier this month.

Monday’s case centres on Google’s ad tech “stack” — the suite of tools used by website publishers to sell advertisements and by advertisers to purchase them.

In a landmark decision earlier this year, Federal Judge Leonie Brinkema agreed with the US Department of Justice (DOJ) that Google maintained an illegal monopoly over this market.

The current trial is designed to determine what penalties and structural changes Google must undertake to remedy its monopolistic practices.

According to court filings, the US government will argue that Google should:

• Spin off its ad publisher and exchange operations.
• Be banned from operating an ad exchange for 10 years after the divestitures are complete.

Google contends that the government’s divestiture demands:

• Exceed the scope of the court’s findings.
• Are technically impractical.
• Would harm the market and smaller businesses.

Lee-Anne Mulholland, Google’s Vice President of Regulatory Affairs, said: “We’ve said from the start that DOJ’s case misunderstands how digital advertising works and ignores how the landscape has dramatically evolved, with increasing competition and new entrants.”

In Europe, a similar case saw the European Commission, the EU’s antitrust authority, fine Google €2.95 billion ($3.47 billion) earlier this month over its control of the ad tech market.

Brussels ordered behavioural changes rather than a divestiture, drawing criticism for appearing to go easy on Google despite previous indications that a breakup might be necessary.

Trial Timeline

• The remedy phase in the US follows the initial trial which found Google operated an illegal monopoly.
• The trial is expected to last around a week, with closing arguments scheduled a few weeks later.

This trial coincides with a separate US case in which a judge rejected the government’s demand for Google to divest its Chrome browser, largely seen as a victory for the company.

• That case also involved allegations of an illegal monopoly, this time in the online search market.
• Instead of a breakup, Google was required to share data with rivals as part of remedial measures.
• The DOJ had argued that Chrome serves as a gateway to the internet, generating a third of all Google web searches.
• Since the ruling, shares in Google-parent Alphabet have surged by over 20%.

Judge Brinkema has indicated during pre-trial hearings that she will consider the outcome of the search trial when deciding on her path forward in the ad tech case.

These cases form part of a broader bipartisan campaign in the US against the world’s largest technology companies. Currently, the US has five pending antitrust cases targeting major tech firms.

This ongoing legal scrutiny highlights the intense regulatory pressure on global tech giants and signals a pivotal moment in digital market governance.