is a senior policy reporter at The Verge, covering the intersection of Silicon Valley and Capitol Hill. She spent 5 years covering tech policy at CNBC, writing about antitrust, privacy, and content moderation reform.
Google has spent a decade sharpening its “weapons” in an industry that helps sustain large swaths of the open internet, the Justice Department argued before a federal judge Monday. After years of operating an illegal monopoly in two ad tech markets and unlawfully tying its products together, nothing short of a break up will suffice to overcome Google’s “massive head start” over rivals, it claims.
DOJ attorney Julia Tarver Wood began her opening arguments in the remedies trial for the US v. Google ad tech case by quoting Winston Churchill’s warning that “those who fail to learn from history are doomed to repeat it.” The government argued that unless Judge Leonie Brinkema breaks Google up, the company will almost certainly find a way to recreate its unfair advantages that have left publishers feeling they have no choice but to use its products, even when they degrade in quality. Google attorney Karen Dunn, on the other hand, argued that the government’s “radical and reckless 61-page proposal is a swing for the fences.”
The government is specifically asking that Google be forced to sell its AdX exchange, which facilitates transactions between publishers that want to sell space on their websites and advertisers who want to market to their audiences. The DOJ also wants Google to open source the final auction logic behind its publisher ad server, Doubleclick for Publishers (DFP). It argues that would break open the opaque reasoning behind why some ad bids win over others, which government witnesses testified is currently only known to Google. If that doesn’t do enough to restore competition to the markets, the DOJ wants to reserve the option for the court to force it to sell DFP, too.
Google, which is expected to appeal the underlying monopoly ruling once the judge issues her opinion on remedies, argued for behavioral changes, like commitments not to use certain auction tactics, and offering new ways for products to integrate with and compete with rivals. Dunn said Google could complete the technical work to implement this in just one year, versus a decade-plus timeline for the government’s proposals. Rather than unshackle rivals, Dunn charged, the government wants to take Google out of the online ads race altogether.
What’s at stake
Google’s publisher tools are at “the heart of what funds the internet,” testified Andrew Casale, CEO of rival ad exchange Index Exchange. DFP, where the vast majority of US publishers manage display ad space, acts as the “unofficial currency of the internet,” Casale said, and is what helps so many publishers keep content free to access across the web.
Earlier this year, Brinkema found that Google illegally monopolized the market for publisher ad servers, where DFP operates, and ad exchanges, like AdX. She also found Google illegally tied those two products together to benefit itself. By effectively locking publishers into its tools, the government argued, Google has made it so that a disproportionate share of the money that keeps so much of the internet free for end users runs through its own pipes.
Google’s publisher tools are at “the heart of what funds the internet”
Google currently exercises so much control over publishers that it won’t accept any contract revisions for its publisher-side tools, testified Grant Whitmore, VP of ad technology for Advance Local, which runs local news sites across the country. The uniquely large and varied advertiser base that publishers can only really effectively access through AdX by using DFP is the most important part of their revenue. “We had to agree to things that we never would have agreed to with any other provider,” Whitmore testified.
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