Google\u2019s tech empire is increasingly on shaky ground after losing two antitrust cases in less than a year. <\/p>\n
A federal judge ruled Thursday that Google has an illegal monopoly over advertising technology, just eight months after another judge found the tech giant violated antitrust laws with its monopoly over online search. <\/p>\n
As the Department of Justice (DOJ) pushes for a breakup, the two sides are set to meet in court again next week for a trial over the remedies in the search case. <\/p>\n
“It\u2019s a massive blow to Google,\u201d said Jeffrey Shinder, founding partner of the antitrust law firm Shinder Cantor Lerner. \u201cThere\u2019s no avoiding that conclusion.\u201d <\/p>\n
\u201cTwo of the pillars of its power over the internet and the adjacent ecosystems that surround the internet … have been declared unlawful and have a serious cloud over their future,\u201d he added. <\/p>\n
U.S. District Judge Leonie Brinkema ruled Thursday that Google has a monopoly over two markets in the ad tech space. Ad tech is used to connect publishers and advertisers online to fill ad space. <\/p>\n
Google monopolized the market providing tools to publishers and the market connecting publishers and advertisers, referred to as an ad exchange, Brinkema found. <\/p>\n
Monopolizing a market on its own is not illegal, however. The judge ruled that Google violated antitrust law by tying its ad tech products together and instituting anticompetitive policies that allowed it to acquire and maintain its monopoly.<\/p>\n
\u201cGoogle will fight this, but it was clearly a gut punch, and they\u2019re going to have to go back to the drawing board to look at business model tweaks, depending on what the appeal process looks like,\u201d Wedbush Securities analyst Dan Ives told The Hill.\u00a0\u00a0<\/p>\n
\u201cI don\u2019t believe it structurally changes their business model, but it clearly is a sign that they\u2019re going to have to adjust their advertising strategy,\u201d he added. <\/p>\n
Google has claimed a partial victory, pointing to Brinkema\u2019s determination that there is no separate market for advertisers online and that Google\u2019s ad tech acquisitions were not anticompetitive. <\/p>\n
This could be helpful for Google because it narrows the potential remedies that can come out of the case, former Federal Trade Commission (FTC) Chair William Kovacic said. <\/p>\n
\u201cIt will tend to moderate remedy rather than to lay a foundation for a bolder remedy,\u201d he said. <\/p>\n
\u201cAt the same time, this is the second time in a short while that a court, indeed a thoughtful judge in both cases, has decided that they did have monopoly power and that they used it improperly,\u201d he continued. <\/p>\n
The tech giant plans to appeal \u201cthe other half\u201d of the decision, said Lee-Anne Mulholland, Google\u2019s vice president of regulatory affairs. <\/p>\n
\u201cWe disagree with the Court\u2019s decision regarding our publisher tools,\u201d she said in a statement Thursday. \u201cPublishers have many options, and they choose Google because our ad tech tools are simple, affordable and effective.\u201d <\/p>\n
Google also intends to appeal the decision in the search case, in which U.S. District Judge Amit Mehta found the company illegally maintained a monopoly over online search by entering into exclusive agreements with device manufacturers and browsers. <\/p>\n
However, before it can appeal, Google must face off against the DOJ in court once again, this time over remedies. The remedies hearing is set to last three weeks, with Mehta previously saying he intends to rule by August. <\/p>\n
The government has asked the judge to force Google to sell off Chrome, arguing the tech firm\u2019s control of the browser stands in the way of efforts to open up the market. If this fails to rein in Google\u2019s monopoly, the DOJ has suggested also splitting off Android. <\/p>\n
It was initially unclear whether the new administration would follow through on the DOJ\u2019s demands for a breakup, after President Trump appeared skeptical of such a move last fall, suggesting it could empower China. <\/p>\n
Even so, Trump’s DOJ reaffirmed last month that it is still seeking to break up Google and Chrome.<\/p>\n
Google has argued the government\u2019s proposals go well beyond the parameters of the case and risk harming consumers and innovation.\u00a0<\/p>\n
It emphasized in a pretrial filing Monday\u00a0that the underlying code for both Chrome and Android are \u201cdeeply intertwined with and dependent on Google\u2019s core infrastructure.\u201d\u00a0<\/p>\n
\u201cTheir result-oriented purpose is to force consumers, browser developers, and sellers of Android mobile devices to use rival search engines\u2014even though rivals are demonstrably inferior to Google and consumers overwhelmingly prefer Google,\u201d the company wrote. <\/p>\n
While the two cases against Google are separate, they could influence one another, especially as both head into the remedy phase. <\/p>\n
\u201cI\u2019m wondering if there will be some effort in the search case, and later in this one, to think about what solution should the court be looking for in light of what\u2019s happened in the ad tech case,\u201d Kovacic noted.<\/p>\n
Jariel Rendell, a partner with Jenner & Block who previously served as counsel to the assistant attorney general in the DOJ\u2019s antitrust division, suggested the pair of Google decisions will boost the division’s “confidence and resolve.\u201d <\/p>\n
\u201cFor the first time, the Antitrust Division sued the same company in two different cases, in two different courts, over two distinct sets of alleged antitrust violations \u2014 and litigated both cases simultaneously,\u201d he said in a statement to The Hill. \u201cAnd the Division won both.\u201d <\/p>\n
\u201cDespite resource constraints, they\u2019re now better positioned \u2014 and more emboldened \u2014 to take on even bigger antitrust challenges,\u201d Rendell added. <\/p>\n
Beyond the two Google cases, the DOJ and FTC have brought several high-profile challenges against major tech firms, including Amazon, Apple and Meta, over the past few years. <\/p>\n
The Meta trial kicked off earlier this week, with CEO Mark Zuckerberg taking the stand for three days to answer questions about his company\u2019s acquisitions of Instagram and WhatsApp. <\/p>\n
\u201cIt adds to the overhang that Google, Meta, Apple, Amazon are facing in the Beltway,\u201d Ives said of the Google decision. \u201cThe walls are caving in. The strong have gotten stronger in Big Tech, but the regulatory headwinds are there. <\/p>\n
\u201cIt\u2019s not just going to be about paying fines,\u201d he added. \u201cThey\u2019re going to have to tweak some of their business models, open up to third parties, and there clearly could be an impact there.\u201d <\/p>\n","protected":false},"excerpt":{"rendered":"
Google\u2019s tech empire is increasingly on shaky ground after losing two antitrust cases in less than a year. A federal judge ruled Thursday that Google has an illegal monopoly over<\/p>\n