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Google has illegally built “monopoly power” with its web advertising business, a federal judge in Virginia has ruled, siding with the Justice Department in a landmark case against the tech giant that could reshape the basic economics of running a modern website.
The ruling that Google violated antitrust law marks the US government’s second major court victory over Google in less than a year amid claims the company has illegally monopolized key parts of the internet ecosystem, including online search. And it is the third such decision since a federal jury in December 2023 found that Google’s proprietary app store is also an illegal monopoly.
Taken together, the trio of decisions highlights the breadth of trouble Google faces, raising the prospect of sweeping penalties that could reshape multiple aspects of its business, though ongoing and expected appeals will likely take years to play out.
Thursday’s decision by District Judge Leonie Brinkema, of the US District Court for the Eastern District of Virginia, addresses the $31 billion portion of Google’s ad business that matches website publishers with advertisers. This “stack” of technologies determines what banner ads appear on countless sites across the web.
Google parent company Alphabet announces plans to lay off approximately 12,000 employees representing 6% of its global workforce in an effort to cut costs in the latest sign of a slowing economy.
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The Justice Department’s lawsuit followed years of criticism that Google’s extensive role in the digital ecosystem that enables advertisers to place ads — and for publishers to offer up digital ad space — represented a conflict of interest that Google exploited anticompetitively.
Google and the Department of Justice did not immediately respond to requests for comment.
But Google had argued that the Justice Department’s argument is “flawed” and would “slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow,” according to a statement from a company spokesperson after the lawsuit was filed in 2023.
Brinkema, however, wrote in her 115-page decision that by tying its ad server and ad exchange together, Google was able to “establish and protect its monopoly power in these two markets.”
“In addition to depriving rivals of the ability to compete, this exclusionary conduct substantially harmed Google’s publisher customers, the competitive process, and, ultimately, consumers of information on the open web,” she wrote.
Thursday’s ruling could force Google to divest part of its online ad business, although the company is likely to appeal the decision which could delay any potential remedy for months or years.
The decision is also part of a wider push by regulators to check the power of large tech companies including Apple, Meta and Amazon in addition to Google parent Alphabet. Just this week, Meta CEO Mark Zuckerberg took the stand in a trial over a blockbuster antitrust lawsuit in which the US Federal Trade Commission accused the social media giant of buying would-be competitors to stifle competition.
–This is a developing story. It will be updated.
CNN’s Lizzie Jury contributed reporting.
