Breaking up Google’s ad tech monopoly is, apparently, like going to Mars or trying to replace Michael Jordan — dubiously possible and a huge amount of work.
Those were some of the analogies witnesses testifying in Google’s defense told a federal judge this week as the company mounts its second attempt to stave off a break up. After successfully beating that fate in the Justice Department’s Search case, Google made its case to Virginia-based District Court Judge Leonie Brinkema to let it keep its ad tech business intact too. Along the way, Google witnesses argued it need not give up monopoly power to restore the competition it damaged, and the judge gave mixed signals about how she may rule.
The DOJ spent the prior week arguing that forcing a sale of Google’s AdX exchange and open sourcing part of its DoubleClick for Publishers (DFP) ad server is both technically feasible, and the only way to ensure Google doesn’t find new ways to wield its dominance at the expense of publisher customers. As Google lodged its defense, it marshalled in one executive and expert after another to explain the scale of the project, and warn that a break up may simply introduce new problems.
“It is a massive undertaking,” Google Ad Manager (GAM) Engineering Director Glenn Berntson testified. Even if a divestiture of AdX doesn’t include ripping out other pieces of Google’s proprietary infrastructure, he said, it’s only marginally better. “Going to the moon is simpler than going to Mars.” Other witnesses testified to the long list of ways Google says a break up is more difficult than it sounds: it’s technically complex, it’s unclear whether Google employees would actually go to work for an AdX buyer or just leave, and customers could be harmed in the process. “We’re trying to replace the Michael Jordan of databases,” Google’s technical expert Jason Nieh testified, pointing to just one of the many Google proprietary services the ad tech tools would need to swap if pried from the company. “There’s only one Michael Jordan, and he’s irreplaceable.”
“We’re trying to replace the Michael Jordan of databases”
Brinkema already ruled that Google illegally monopolized two markets for ad tools publishers rely on to bring in revenue, and illegally tied them together to benefit its own business. Throughout Google’s defense, it was at times easy to lose track of this. Google’s economic expert Andres Lerner showed a slide similar to one Google used to argue its case in the earlier liabilities trial, meant to defend the efficiencies of AdX and DFP’s close-knit nature, despite the fact that Brinkema already ruled the tie was illegal and kept publishers locked in. Google witnesses also testified about stagnating growth in open web display advertising — the market in which Google’s conduct suppressed competition for a decade.
What Google is (and isn’t) willing to give up
Targeted changes to Google’s behavior are the most effective and least risky way to restore competition, Google argued throughout its case, including through external witnesses like the CEO of WikiHow Google ad tech executive Tim Craycroft even riffed on concessions Google hadn’t originally offered, saying the company would be “very open to making a formal commitment” not to integrate its buying tools to directly bid into DFP. But he also wouldn’t commit on the stand to lowering AdX’s 20 percent take rate, which the court ruled was higher than would exist in a competitive market.
“I see a tension there”
Google won’t even concede to banning some business practices it says it’s not currently using. Google doesn’t use data from its other businesses like YouTube or Search to power its ad tech business, it says, but it wants the option open should it become an important way to compete. In fact, Google shouldn’t even have to give up its monopoly power, as long as it stops using it unfairly, according to Lerner. Later, though, he said that remedies should generally unfetter the market from anticompetitive conduct. “Which is inconsistent with the concept that some monopoly power can continue,” Brinkema responded. “I see a tension there.”
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