On the 5th November 2024, the US Department of Justice submitted its final proposed remedies in the US Google AdTech trial under Judge Brinkema. The proposed judgement called for significant sanctions against Google to end its illegal monopoly conduct, restore competition in the AdTech marketplace, punish Google for its ill gotten monopoly gains and to prevent remonopolisation in the future.
The key recommendations were for Google to divest its advertising exchange, AdX (DOJ proposal, p. 8-9), and potentially its SSP, DFP (DOJ proposal, p. 10-13), as well as to put in place mechanisms to prevent its from being able to advantage itself in advertising auctions on DFP prior to any divestiture.
However, whilst these remedies seem significant, there are concerns that Google could look to avoid the worst impacts of these remedies by leveraging its acknowledged power in other areas and markets. If the final judgement is to deliver the fairer internet that the court – and the wider AdTech marketplace – are looking for, then it’s essential that these loopholes are closed.
The 5 routes via which Google could sidestep the remedies are:
• Ownership of Android and Chrome
Judge Mehta declined to force the divestiture of Android OS or Chrome browser in the Search dominance case and this leaves Google in control of a monopoly machine. Without controls over its dominance in consumer access points to the web, it will be able to continue to dominate and distort B2B ad markets in a range of ways.
• First-Party Data Advantage
Google collects user data from its Android OS, Chrome browser, in addition to its other B2C services (YouTube, Gmail, Maps, and more). It then feeds that unique data into its own advertising tools, giving it auction insights that no rival can match.
• Direct Deals with Publishers (Deal IDs)
Google could use its enormous buying power to cut private advertising deals directly with publishers. Google could bypass a post-divestment AdX by using its scale to secure direct access to publishers’ inventory and guaranteed lower prices. By avoiding Adx, Google can continue to use its dominance in Search ads to coerce publishers to provide Google supracompetitive margins, an issue highlighted by the court.
• “Privacy & Security” Excuse
By using scary warnings to consumers about privacy in order to encourage them to opt out of interoperable technologies such as Cookies, Google could limit rival companies’ access to data. But Google still keeps its own data advantage, reinforcing its lead in targeted advertising. Google’s settlement of a CA privacy lawsuit already highlights how Google intends to use this exact method to circumvent the proposed remedies, which require Adx, DFP and Prebid to be able to continue exchanging match keys that Google intends to remove.
• On-Device Monetization (Sandbox)
Google may argue that ads delivered directly on devices (via its “Privacy Sandbox”) are not covered by the court’s order. That keeps a huge part of Google’s ad business outside the remedies.
As we saw in the recent Search case under Judge Mehta, there is significant potential for the remedies to change between the proposed final judgement and the court’s final ruling. We would hope that the core thrust of these remedies is retained but we would also counsel that they must be worded carefully, and supported by rigorous non-circumvention rules if they are to be truly effective.
Also, a basic difference between EU and US law is that under US law there is famously no duty to deal. In EU law there is an obligation for a dominant business not to discriminate, and if the treatment of all equally requires new contracts to be entered into then that must take place. What this means for the relationship between Google Ads and all third-party ad exchanges is an open question. Prior to Judge Mehta’s recent judgement in the USA vs Google (Search) the US position would have been governed by the obligation on the Court to unfetter the market. All exchanges could reasonably have looked forward to some sort of capped equitable sharing of exchange traffic. Now we have seen that Google will argue that it would be equitable for it and its downstream business to keep all the traffic under one roof. that obviously won’t encourage competition. Maybe Judge Brinkema will have to adopt a different approach to Judge Mehta. Here she may be supported by the position of the EU Commission on remedies for its AdTech decision which was decided on 5rd September which is likely to be looking for non-discrimination in the on-going relationship between Google’s ads business, its ad exchange and all competing exchanges.