Feds call for breakup of Google in ad tech antitrust trial

ALEXANDRIA, Va. (CN) — Google must be divested of a significant piece of its ad operation, a U.S. Department of Justice attorney charged Monday at the launch of a trial to determine how the tech titan’s antitrust violations will be remedied.

Google’s executives made calculated decisions that resulted in its dominance of the ad tech market according to Julia Tarver Wood, senior litigation counsel for the Department of Justice’s antitrust division. In opening statements Monday, she described the tech giant as a “recidivist monopolist,” and asserted that nothing short of divestiture would change that.

“Without meaningful, strong remedies, these markets will not be fixed,” Wood said.

Legal filings by the Justice Department specify that the government seeks “a mix of structural, behavioral, and administrative remedies, including divestiture of Google’s AdX ad exchange and phased divestiture of its DFP publisher ad server.”

But the divestiture proposal is “radical and reckless,” fired back Google’s lead attorney Karen Dunn. The government would reserve to itself authority over a major American technology company, she charged, recounting that one witness expected to testify has described divestiture as incredibly messy and highly risky.

Pushing back on the argument that divestiture was necessary to bring about change, Dunn noted Google will be under a court order and “the court is not going to hesitate to enforce its order.”

Google proposes behavioral changes far afield of divestiture. In court filings, for example, lawyers proposed making “realtime bids for open-web display ads from AdX available to all rival publisher ad servers."

This is the second time this year that Google attorneys are fighting divestiture – this time of the tech giant’s ad tech arm.

U.S. District Judge Leonie Brinkema, a Bill Clinton appointee, is presiding. She convicted Google in April of operating part of its ad tech business as a monopoly.

Possible witnesses for the government include a onetime employee of both Facebook and Meta, a software engineer, the chief digital officer of a website and a European entrepreneur. For its part, Google may call several top engineers, a Columbia professor and an economist.

Filed in 2023, the case followed an investigation by the U.S. Department of Justice. Backed by 17 states, the department’s 150-page complaint accused the Silicon Valley giant of engaging in a systematic campaign to seize control of high-tech tools used by publishers, advertisers and brokers to facilitate digital advertising.

In addition, Google is fighting multiple lawsuits. The ad tech firm PubMatic sued Google this month, demanding $1 billion in damages and contending the tech giant thwarted its success. The firm Magnite filed a lawsuit making similar claims. Originally known as the Rubicon Project, Magnite is described in filings as one of the independent rivals that struggled to compete with Google.

“Magnite’s ability to win share in open-web display advertising has always been stymied by the fact that Google writes (and rewrites) the rules of the game in its own favor,” Magnite says in its lawsuit.

In another case, a U.S. District Court judge in Washington, D.C. found the company violated antitrust law with its search business.

The tech titan faces trouble overseas as well. This month, European regulators slammed Google with a $3.2 billion fine over accusations the company abused its dominance in digital advertising technology.