A federal court judge has found that Google maintained illegal monopolies in two crucial markets for online advertising technology. These markets only include publisher ad servers and ad exchanges. This ruling illustrates the tremendous power the company has to determine how transactions take place within the digital ad market. Prosecutors argue that Google’s tactics amount to antitrust violations. They claim the tech behemoth had a hand in the merger madness, employing old-school monopoly-building strategies to kill competition through cut-throat buyouts.
What these court findings show is a pretty scary pattern. Google has a long history of locking customers into its products, making it extremely difficult for them to switch to competitors. This strategy has allowed the company to keep its stronghold over the increasingly lucrative digital advertising space. The May 19th ruling has raised alarms regarding the potential fragmentation of Google’s advertising products. If implemented, this change would profoundly alter the scope of online advertising.
Despite the gravity of these allegations, prosecutors have faced criticism for overlooking competition from major players such as Amazon.com and Comcast. We estimated that 80% of digital ad spending is now going to apps and streaming video. This new reality is dramatically shifting the competitive landscape in the marketplace. Critics contend that the reliance on Google’s historical bad acts does little to address the current state of play in what is a highly competitive marketplace.
A representative from Google remarked that the case emphasizes historical practices rather than acknowledging the company’s ongoing efforts to adapt. Google has been busy improving its tools to integrate and interoperate with competitors’ products. This is evidence of their desire to open up the marketplace.
The ruling also goes deeper into the question of Google’s business practices. A federal judge in Washington will soon be trial striking at the Department of Justice’s injunction request. They’re asking the court to require Google to sell off its popular Chrome browser. This is a significant development that has the potential to upend Google’s market dominance. It would force radical changes to how Google does business in the entire digital advertising ecosystem.