3 takeaways from the Google ad tech monopoly ruling

Google found itself on the wrong side of an antitrust ruling for the second time in a year, this time for its ad tech monopolization.

Judge Leonie Brinkema concluded in her decision that Google used its market power to suffocate competition and publishers’ bottom lines without regard for the product quality it was serving.

“Google further entrenched its monopoly power by imposing anticompetitive policies on its customers and eliminating desirable features,” Brinkema wrote. “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.”

Marketers believe this could be a watershed moment for the future of the digital advertising industry. Here are three of the biggest takeaways from the ruling, with an eye on the path forward.

“This ruling is just the starting gun,” says Attain President and COO Ben Kartzman. “The real question now is: What comes next? Does Google spin out its ad exchange? Do parts of Ad Manager get sold off or shut down altogether? The implications are massive for advertisers and publishers.”

1. A once-in-a-generation opportunity to reset

Innovation was top of mind for every marketer The Current spoke with following the ruling. They’re imagining what the future of the industry could look like with Google’s influence potentially easing up.

“Inside ad tech, we’ve long understood how vertically integrated stacks like Google’s can create seismic shifts that tilt the game in any number of directions,” Eric Shiffman, VP of product marketing at Yieldmo, says. “The real test is whether regulators will follow through with the proposed remedies that unbundled the power. Right now, we’re left with many questions on what could come next.”

The next step in the case is for both sides to submit a joint schedule for briefing before arguing their proposed remedies. If the Google search case is any indication, it could take about a year for Judge Brinkema to rule on remedies. Last August, Judge Amit Mehta ruled that Google had a monopoly over search. Mehta will begin a final two-week hearing on remedies on Monday, April 21, and is expected to make a final decision about exact measures in August. Google said it plans to appeal Judge Brinkema’s opinion finding Google liable for violating antitrust law.

“We won half of this case and we will appeal the other half. The Court found that our advertiser tools and our acquisitions, such as DoubleClick, don’t harm competition. We disagree with the Court’s decision regarding our publisher tools. Publishers have many options and they choose Google because our ad tech tools are simple, affordable and effective,” wrote Lee-Anne Mulholland, vice president, regulatory affairs, in a widely reported statement.

This moment could signal the start of the next era of digital advertising, much like when Google, Facebook and Amazon rose to power after the last major tech antitrust action against Microsoft in 2000.

“Whatever happens from here has the potential to bring about a once-in-a-generation opportunity to reset the open web, and hopefully rebuild it on fairness, transparency and quality,” Shiffman says. “We just can’t afford to sit around and wait — it’s up to all of us to make that change.” 

“This ruling has the potential to unlock a more competitive landscape in digital advertising,” Amol Waishampayan, chief product officer at fullthrottle.ai, tells The Current. “By reducing the gravitational pull of dominant platforms, it could finally give innovative challengers — like transparent AI DSPs and other first-party data-powered solutions — a real opportunity to rise.”

2. Google’s unmatched power tying together AdX and DFP

One of the resounding parts of Brinkema’s 115-page decision was how Google tied together its publisher ad server, DFP, and its ad exchange, AdX, to make it practically impossible to use one without the other.

By tying them together, Google introduced features like First Look, which required publishers using DFP to offer AdX a right of first refusal for every impression. Later, Google created Last Look, which allowed AdX to look at the winning price of every header bidding auction and outbid it.

This flat-out affected publishers’ bottom lines. If an AdX advertiser was willing to bid $1.50 for an impression and a non-AdX advertiser’s top bid was $1.00, Google would see that $1.00 bid and drop its bid to $1.01 using Last Look. The feature eventually ended in 2017.

These features were only beneficial to Google, rather than its customers, according to Brinkema, with Google staff understanding the “coercive power of the AdX-DFP tie.”

“By tying DFP to AdX, Google took advantage of its ‘owning the platform, the exchange, and a huge network’ of advertising demand, which a senior Google manager analogized to ‘Goldman or Citibank owning the NYSE [i.e., the New York Stock Exchange],’” Judge Brinkema wrote.

3. Publishers practically left with no choice

Through all of these dynamics, publishers were handcuffed, the ruling found. Tying DFP to AdX, where 99 of the top 100 publishers held their open-web display businesses, “communicated to publishers that if they used a rival publisher ad server, they would be shut out of AdX’s core functionality.”

Multiple publishers, including those from The New York Times, the Daily Mail and Gannett, testified that they did not build their own in-house ad servers due to the significant barriers to entry, the complexity in setting up and running one, as well as the difficulty in gaining publisher customers.

Further, publishers “almost always use a single ad server for open-web display ads because operating two or more publisher ad servers would not be practical due to challenges with forecasting, integration, and latency," Judge Brinkema noted.

These conditions were not in the best interests of its publisher customers, but without solid leverage, Google could exploit the publishers and keep its monopoly power, according to the ruling.

The tech giant decreased product quality and harmed competition by “further entrenching Google as the dominant company in open-web display advertising,” Brinkema wrote. “Google made these changes, despite customer complaints, by exploiting its durable monopoly power in the open-web display ad exchange and publisher ad server markets.”

The Current is owned and operated by The Trade Desk, Inc.