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Why Does the DOJ Want to Break Up Google’s Ad Business Now?

The Justice Department returns to court seeking a structural breakup of Google’s digital ad business, arguing its dominant ad exchange and ad server harm competition and publishers.

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By Olivia Hall

4 min read

Image Credit: Unsplash
Image Credit: Unsplash

The U.S. government has launched its second major attempt to chip away at Google’s technology power, this time by targeting the company’s allegedly monopolistic grip on digital advertising.

The trial now underway in Alexandria, Virginia, is considered a pivotal test of antitrust enforcement, as federal regulators seek to change the way online ads are sold, served, and monetized.

Presided over by Judge Leonie Brinkema, the two-week 'remedy trial' follows an April ruling that found Google guilty of violating antitrust laws by dominating both the publisher ad server and ad exchange markets.

The outcome could have substantial implications for online publishers and advertisers across the digital economy.

What Is at Stake in the Latest Google Trial?

At risk is the future of Google’s digital advertising network, which sits at the heart of the company’s revenue model. The Department of Justice’s case argues that Google’s ad tech business, built up over 17 years, effectively locks out competitors, raises the cost of advertising for businesses, and reduces the revenue share for publishers.

Alphabet, Google’s parent, generated $305 billion last year, most of it from this sprawling, complex ad engine.

According to government lawyers, the trial’s fundamental question is whether Google’s dominance harms innovation and market choice to such an extent that only a forced breakup can restore competition.

Google is under pressure from the DOJ to divest its AdX ad exchange and promote more transparency in the online ad buying and selling process.

Did you know?
Google’s AdX exchange reportedly charges online publishers a 20% fee for each ad auction, a cut that has drawn strong criticism from industry groups.

How Did Google Allegedly Monopolize Digital Advertising?

Judge Brinkema’s prior ruling details a consistent pattern of anticompetitive conduct stretching back over a decade. The court found Google used its control over both the publisher ad server and ad exchange to coerce online publishers into relying on its technology, often tying in services that enhanced the company’s downstream ad auction revenues.

Internal documents revealed at trial highlighted Google executives’ awareness of the advantages gained by binding services together.

In one example, a manager acknowledged the AdX exchange’s “not worth 20%” fee but justified it based on the company’s strength in driving ad demand, effectively forcing publishers to accept steeper cuts.

What Structural Changes Does the DOJ Want?

The Justice Department proposes a sweeping set of remedies. These include forcing Google to divest its AdX exchange, which powers high-speed online ad auctions and underpins much of its ad empire.

The government also called for Google to make the AdX auction algorithm open-source and to ban Google from operating any ad exchange business for 10 years following any breakup.

According to filings, these proposals aim to ensure a level playing field for publishers and advertisers, while transparent processes reduce the risk of future market abuse.

Google faces a significant risk: the loss of AdX could disrupt billions in ad revenue and revolutionize global digital marketing practices.

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How Is Google Defending Against These Breakup Plans?

Google’s legal team has countered that the Justice Department’s approach goes far beyond the violations found by the court and threatens to harm businesses large and small by reducing ad technology innovation and efficiency.

The company instead offers a set of behavioral remedies, such as enabling rivals' access to its ad auctions and loosening integration policies that stop short of divesting core business assets.

Google also points to advances in artificial intelligence and new market entrants as evidence that ad tech competition is intensifying, making a breakup unnecessary.

The company maintains that the DOJ’s proposals would unfairly punish a U.S. success story and set a dangerous precedent for regulating innovation.

What Are the Broader Implications for Big Tech?

The outcome of the remedy trial could reverberate throughout the tech sector and beyond. A forced breakup of Google’s ad tech stack would mark one of the most aggressive antitrust interventions in modern history, creating a playbook for future actions against other digital giants.

Judge Brinkema has signaled she will consider previous federal antitrust outcomes, including the favorable ruling for Google on the Chrome browser, when making her final decision.

The stakes could hardly be higher: for Google, for thousands of publishers and advertisers, and for government efforts to police digital markets in a rapidly changing technological landscape.

Should the court force Google to sell its ad exchange business?

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