The recent ruling by a US judge that Google holds illegal monopolies in its advertising technology (ad tech) business has raised the possibility of significant changes for the tech giant, including a potential breakup of parts of its ad operations. Google plans to appeal the decision, but the outcome could reshape how it manages its advertising business.
Post the Court order, Google sent a memo to employees asking them to focus on their work and not fret about the company’s loss of “parts of” its online advertising monopoly case. In a note to staff, Google VP of regulatory affairs Lee-Anne Mulholland said it’s important for employees to “continue to focus on our users and customers by building amazing products that help people around the world.”
Here’s a breakdown of what the case is about, why it matters, and what could happen next.
What Is This Case About
This case focuses on Google’s ad technology, specifically its Google Network division, which operates an auction-style system that helps advertisers buy digital ad space across the internet. This system determines which ads appear where and at what cost. Unlike a separate antitrust case targeting Google’s search engine dominance, this lawsuit is not about search but about how Google controls the tools and platforms used for online advertising.
What are the allegations against Google
The US Justice Department argued that Google’s dominance in ad tech allows it to unfairly block competitors, harming web publishers like news outlets that rely on ad revenue. The judge agreed, ruling that Google’s practices create illegal monopolies.
What is Google’s Defense
Google claimed its success comes from offering superior technology, not anti-competitive behavior. Advertising is a massive part of Google’s parent company, Alphabet, generating about 75% of its $350 billion revenue in 2024. However, the Google Network division at the heart of this case accounts for just 8.7% of that revenue.
Why Does the Ruling Matters
The ruling is significant because it challenges Google’s grip on the digital advertising ecosystem. Google’s ad tech tools, like Google Ad Manager, are central to how ads are bought and sold online. The judge found that Google’s control over these tools stifles competition, which can lead to higher costs for advertisers and lower earnings for publishers.
For Google, losing parts of its ad tech business could reduce revenue, though experts estimate the impact would be less than 10% of Alphabet’s total earnings. For example, Google Ad Manager, a key platform in this case, represented just 4.1% of revenue and 1.5% of operating profit in 2020.
For the Industry, a more competitive ad tech market could make it easier for advertisers and publishers to use alternative platforms, potentially lowering costs and increasing revenue for websites like news outlets.
For Policy, the case shows rare bipartisan support, with both the Biden and Trump administrations backing the Justice Department’s efforts. This signals strong political will to regulate Big Tech.
What Happens Next
The judge will now decide on remedies, or penalties, to address Google’s illegal monopolies.
Google Vows to Appeal
Google has vowed to appeal the ruling, which could delay or alter the outcome. The remedy phase and appeal process could take months or even years to resolve.
Full text of Google’s memo:
Today, a U.S. district court issued a mixed decision in our advertising technology case with the U.S. Department of Justice (DOJ). We asked Lee-Anne Mulholland, VP of Regulatory Affairs, for her thoughts.
Give us an overview of the court’s decision today.
The court delivered a mixed ruling in the DOJ’s lawsuit focused on some of our ad tech. It rejected key parts of the DOJ’s case: The court found our advertiser tools don’t harm competition and our acquisitions of DoubleClick and AdMeld were not anticompetitive. But it agreed with the DOJ’s claims about one of our publisher tools. In other words, we won half, lost the other half.
For those unfamiliar, what’s the focus of this case?
This case is focused on the tools we provide to advertisers and publishers for third-party display advertising on the web. While these tools are valuable for those customers, they represent a narrow part of our advertising business — separate from Search and YouTube ads. Specifically, it looked at whether some of our advertising technology — tools that connect advertisers (like retailers) and ad sellers (typically website owners) — violated antitrust law; as well as whether our acquisitions in this space were anticompetitive.
What are the next steps?
On this case, there is a ways to go; this is definitely not the final word. We will next go to trial to decide the remedies in this case, and then we will appeal the decision. We believe we’re strongly positioned to appeal based on established Supreme Court precedent, the facts of our case, and the findings of the court today:
The ruling doesn’t align with how the Supreme Court has previously viewed multi-sided markets like ours, which involve advertisers, publishers, platforms, and users.
The ruling incorrectly suggests a company like ours has a legal obligation to do business with competitors. This is contrary to past Supreme Court decisions.
The court recognized that our advertising tools operate in a competitive market, alongside major players in social media and beyond.
The ruling found that our acquisitions in this space (DoubleClick and Admeld) did not harm competition.
Publishers have tons of options and they choose Google because our tools are simple, affordable, and effective.
Is there anything else you want Googlers to know?
There’s been a lot of interest by regulators in our ad tech products around the world for many, many years so this scrutiny isn’t new! We’ve long invested in ad tech because it goes back to our mission of making information universally accessible and useful. Ad tech helps online publishers, content creators, and bloggers make money—which in turn keeps the internet free and open to use for all of us.
We’re deeply committed to providing solutions to a wide array of publishers and advertisers in a highly competitive sector. The Regulatory Affairs team will keep working to challenge this case through the appeals process. It’s important for Googlers to continue to focus on our users and customers by building amazing products that help people around the world.
