Judge orders changes to Google's digital ads business but spares it from a breakup

On Wednesday, a federal judge ordered Google to implement changes to its digital advertising system, preventing the company from being broken up despite government demands. U.S. District Judge Leonie Brinkema's decision comes as the second reprieve for Google in a year following a similar proposal from the Justice Department. The ruling impacts Alphabet Inc., Google's parent company, which has a market value of $4.11 trillion.

The specific remedies will remain confidential for 14 days to allow parties to review and propose redactions. Google's vice president for regulatory affairs, Lee-Anne Mulholland, expressed satisfaction with the court's decision to reject the DOJ's proposal to dismantle tools supporting small businesses. The judge's ruling contrasts with a previous case where Google was deemed an illegal monopoly in 2024 and faced a penalty that would have required selling its Chrome web browser.

The court also dismissed the government's argument that Google should sell parts of the technology powering its ad system. The ruling marks a departure from the Justice Department's stance during the trial's remedy phase in November. Google argued that breaking up the complex ad technology network would be unduly harsh, as it handles 55 million requests per second and is essential for consumers.

Brinkema agreed to most of the suggested remedies, acknowledging the need for the technology to function for millions of users. Despite the changes, investors are likely to view the ruling as a speed bump for Google, which has recently benefited from AI technology. Following the ruling, Alphabet's stock price surged 45%, adding $1.3 trillion in shareholder wealth.