Google could be broken up after judge’s ‘illegal monopoly’ finding

Google could be forced to break up its empire after a United States court found the tech giant was operating illegal monopolies over the digital advertising market.

Google could be forced to break up its empire after a United States court found the tech giant was operating illegal monopolies over the digital advertising market.

In a historic ruling that could reshape the online ad landscape, Judge Leonie Brinkema found Google had harmed its publishing customers, competition, and individual internet users.

The case, brought by the Federal Government and 17 states, alleged the US$2.8 trillion company had wilfully acquired and maintained monopoly power in the open-web display publisher ad server and exchange markets which connects buyers and sellers.

It also alleged Google unlawfully tied its server and exchange businesses, effectively forcing customers to use both services, in violation of the Sherman Act which prohibits anti-competitive business activity.

Google CEO Sundar Pichai speaks during the Stanford Business, Government, and Society Forum at Stanford University on April 3. Picture: Getty Images via AFP

Judge Brinkema dismissed a third complaint alleging Google also monopolised another area of the ad market, but ruled against Google on the other claims.

“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,” Judge Brinkema wrote in her judgment.

“Google further entrenched its monopoly power by imposing anti-competitive policies on its customers and eliminating desirable product features.

“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.”

In a statement after the ruling, a Google spokesperson said the company would appeal the decision, saying “we won half of this case and we will appeal the other half”.

“We disagree with the Court’s decision regarding our publisher tools,” Google Vice President Lee-Anne Mulholland said.

“Publishers have many options and they choose Google because our ad tech tools are simple, affordable and effective.”

A man walks past Google's offices Picture: AP

Media companies, including from this masthead’s publisher News Corp, gave evidence during the three-week trial last year in which a former employee said the company considered ditching Google’s advertising products as early as 2017 but found it would have cost US$9 million in lost revenue.

Further hearings will be held to determine an appropriate penalty, which could include a forced sale of parts of the business.

It marks the tech giant’s second major antitrust loss after another US court last year ruled Google had abused its dominance of the US search market.

A hearing is scheduled to begin next week examining remedies in that case, including a submission by the Justice Department to break the company up.

Google is facing a similar court action in the UK.