Google may be forced to sell off part of its advertising business, after a federal judge ruled that the tech giant held an illegal monopoly over online ad markets.
At a Thursday hearing in Alexandria, Virginia, U.S. District Judge Leonie Brinkema ruled that the company unlawfully monopolized markets for publisher ad servers and the market for ad exchanges that sits between buyers and sellers.
Prosecutors at the Justice Department filed the lawsuit in early 2023, and accused Google of having “rigged the rules of auctions” for online ads, negatively impacting online publishers, advertisers as well as the public.
The company used classic monopoly-building tactics of eliminating competitors through acquisitions, locking customers into using its products, and controlling how transactions occurred in the online ad market, prosecutors said at trial.
Thursday's ruling could allow prosecutors to push for a breakup of Google's advertising products, potentially hurting the company's bottom line and changing the ways that online sellers receive ads.
Stocks in Alphabet, the parent company of Google, fell slightly Thursday following the ruling, down less than one percent as of mid-afternoon.
"Plaintiffs have proven that Google has willfully engaged in a series of anticompetitive acts to acquire and maintain monopoly power in the publisher ad server and ad exchange markets for open-web display advertising," Brinkema wrote in his ruling.
"For over a decade, Google has tied its publisher ad server and ad exchange together through contractual policies and technological integration, which enabled the company to establish and protect its monopoly power in these two markets."
Brinkema will now determine what penalties to impose on Google in order to restore competition to the market.
The tech giant now faces the possibility of two different U.S. courts ordering it to sell assets or change its business practices, as another trial – due to be held in Washington next week – looms. That trial will cover the DOJ's request to make Google sell its Chrome browser and take other measures to end its dominance in online search.
In a similar case last year a federal judge also found that Google illegally abused its market power to quash competition in internet search. “Google is a monopolist, and it has acted as one to maintain its monopoly,” wrote Judge Amit P. Mehta of the U.S. District Court for the District of Columbia.
