Tech Policy Press - A Deep Dive into the Antitrust Remedies that Spared Google's Ad Tech Business
Senior reporter Karina Montoya argues that the court’s behavioral remedies against Google’s ad tech monopoly offer some new protections for publishers and competitors, but fall short of the structural breakup needed to meaningfully dismantle Google’s market power.
The memorandum explaining the court’s remedies ruling for Google’s illegal monopoly over advertising technologies (ad tech) is now unsealed. About two weeks ago, Judge Leonie Brinkema posted a short summary outlining the gist of it: Don’t expect any divestiture orders. Remedies will be behavioral only, with some modifications ordered by the court.
To refresh our memories, the remedies trial that ended a year ago was mainly focused on deliberating structural remedies. The plaintiffs—the Department of Justice and a coalition of 17 states— argued that without structural separations, there would be a door open for Google to unlawfully leverage its control of the entire ad tech stack.
The plaintiffs sought a divestiture of Google’s ad exchange, AdX, and its publisher server, DFP. As the liability ruling found, the platforms were unlawfully tied, and Google also created dozens of policies to disadvantage competitors and manipulate ad auctions to favor its own business. Such policies, dubbed “First Look,” “Last Look,” and “Unified Pricing Rules,” among others, fortified Google’s monopoly, overcharging publishers for connecting them to advertisers and gaining full control of how they priced their ad spaces.
Why Google keeps its ad tech stack
As egregious as it sounds, however, the Judge ended up giving deference to Google’s stance against a break-up, as well as to the remedies ruling in the Google Search case (which not only rejected to break up Chrome, but struck down key behavioral remedies). She deemed a break up would be too complex and represent too much work for Google, and that behavioral remedies such as data sharing and interoperability remedies would fulfill the same function. In addition to that—“as Google correctly argues,” the ruling reads—divestitures aren’t applied to unlawful tying cases.
The Judge also downplayed the plaintiffs’ evidence that Google had repeatedly come up with new tactics to advantage itself whenever it phased out a certain policy that clients found coercive and unfair, or that Google had also violated remedies ordered by competition authorities in other nations that investigated the same unlawful practices this case did. Under her analysis, structural remedies are not imposed to provide “certainty” that a monopolist would not have incentives to break the law again.
Her focus was in not disrupting the market, albeit the market has remained undisrupted precisely because it’s captured by a monopolist. Somewhat surprisingly, the Judge also criticized that plaintiffs requested divestitures without having secured a buyer, even in the face of testimony of interested parties, who also said—as it is typical when deciding over mergers or acquisitions—that they couldn't commit then to buying AdX without doing due diligence first. To the Judge, this all made it seem like an unviable divestiture.
Somewhat hidden and underreported is that the Judge also considered AI as a potential disruptor that could “threaten the stability and growth” of open-web display ads. This consideration was also a factor in the Judge rejecting the proposed divestitures, even after acknowledging that AI is more nascent in the ad tech market than in online search. This reflects the same line of thinking as Judge Amit Mehta, whose analysis of AI challenging Google’s search monopoly has aged so far to show exactly the opposite is happening.
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