In landmark ruling, court declines to break up Google’s advertising business

A federal court today declined to break up Google LLC's ad business, rejecting the U.S. Justice Department's proposal. This ruling comes from an ongoing antitrust lawsuit that began over three years ago. In January 2023, the Justice Department and multiple state attorneys general filed a lawsuit against Google LLC, targeting its display advertising unit.

This unit assists brands in purchasing ad space on third-party websites. The complaint alleged that Google utilized anticompetitive practices to maintain its dominant position in the market. In April 2023, U.S. District Judge Leonie Brinkema of the Eastern District of Virginia ruled in favor of the Justice Department, finding that Google's display advertising business held an illegal monopoly.

The Justice Department argued that the most effective way to address the situation was to sell off certain parts of the business. However, Judge Brinkema dismissed this idea in her latest ruling. The government had sought for Google to sell AdX, a now-defunct display advertising service where brands bid for ad space on publishers' websites.

The lawsuit's central focus was AdX. Publishers historically placed their ad space up for sale on AdX via another defunct Google service called DFP. While DFP seemed to provide an option for website operators to sell their ad space to AdX competitors, Google was found to have restricted competitors' access to DFP. Two features, First Look and Last Look, were also under scrutiny.

First Look granted Google the "first right of refusal" on publishers' ad space, while Last Look tracked the value of competitors' ad space bids. The court determined that Google used this information to outbid rivals and secure additional ad deals.

Today's ruling didn't mandate Google to sell off AdX, but it still requires the company to modify its business practices. Judge Brinkema stated that "most of the parties' proposed behavioral remedies, as modified by this Court, be and are accepted." The specific remediative actions are unclear as the full ruling will be published in two weeks.

Last year, Google presented a series of remedies, including a commitment not to use First Look and Last Look, the anticompetitive features of AdX. The company replaced these with Unified Pricing Rules several years ago. The Justice Department subsequently advocated for Google to open-source certain components of DFP, the service used by publishers to send ad space to AdX.

Neither DFP nor AdX are standalone services; they have been merged into Google Ad Manager. Consequently, the remedies proposed in today's order will most likely concentrate on that service.