Google’s advertising activities are tailored to individual needs

Advertisers or publishers can certainly use alternative services to do each of these things. But Google is accused of using its power to give better deals to companies that use Google tools for all or most of them. And in the case of its own incredibly valuable properties, such as Google Search and YouTube, advertisers have to go through Google’s ad platforms, further entrenching its position, prosecutors say.

Last week, the UK Competition and Markets Authority, investigating the same issues as in the US, said: “Due to the highly integrated nature of Google’s ad technology businesses, the CMA provisionally found that Google’s conduct also prevented rival publisher ad servers from competing effectively…, thereby harming competition in that market.”

Google could challenge the findings and make changes to meet the CMA’s requirements. However, if the regulator’s position becomes final, Google could be fined up to 10 percent of its global revenue. The penalty could be even more severe in the US. The Justice Department, backed by a coalition of 18 state attorneys general, is calling for a forced sale of Google’s ad tech stack, separating the components into individual companies. The EU is calling for the same.

Google, of course, is opposing the move. Its first task in Virginia is to convince a judge that its share of the online advertising market has been overstated. Its lawyers will also argue that Google should not be forced to give competitors access to its proprietary ad technology. The trial is expected to last several weeks and will include testimony from senior Google executives and people in the ad tech and publishing industries.

If Google loses, it will be the second time in a year that the company has been found to be an illegal monopoly. Such convictions have been avoided before.

In the case of search, the Justice Department was not given more time to develop proposed remedies, which is understandable given that the ruling forced longtime Google watchers and antitrust experts to weigh in on the most sensible course of action.

The ad tech stack is a whole other story. It will be much easier to work out and then explain to a judge where those dividing lines can be drawn and what the direct impact on competition might be.

Now, it’s not entirely clear whether forcing Google to divest itself of some of its ad tech would seriously hurt its advertising business. Its competitive advantages in user data, web analytics and browsing habits would remain intact and would be highly desirable. But it would mark a turning point in a new era of antitrust enforcement in the U.S., the first time regulators have successfully forced the breakup of at least parts of a major tech group.

(Disclaimer: The views expressed above are the author’s own. They do not necessarily reflect the views of DH.)