On April 17, a federal court handed down its decision in the Department of Justice’s lawsuit targeting Google’s ad tech, which are a suite of advertising products and services that provide thousands of businesses of all sizes with cost-effective and convenient ways to connect with their customers.
While the court found that the DOJ had failed to prove that Google’s advertiser tools constituted a relevant market in which the company enjoys a monopoly, Judge Brinkema did agree with the government that Google had violated the Sherman Act by monopolizing and unlawfully tying some of its products on the publisher-side of its adtech offering. The court’s decision, regrettably, means that the case will continue to pose the threat of unintended consequences that could make the internet less safe and disproportionately harm small businesses.
DOJ’s claims about Google’s publisher tools target a narrow sliver of the digital advertising ecosystem: third-party display ads on the open web. These are the tools that help connect ad sellers, typically website owners, with retailers, including small- and medium-sized businesses. Currently, there are myriad options for publisher tools. Google has earned its success in this fiercely competitive marketplace, because it has built a product that is simple, affordable, and effective. Google has been pushed by its competitors to innovate and create a product that customers prefer to use.
That matters, especially for small- and medium-sized businesses. These tools lower the cost of advertising, increase reach, and help businesses of all sizes grow. In fact, ad costs are going down, not up, and the volume of digital ads continues to rise. That’s not the profile of a broken market. It’s the result of competition, innovation, and consumer demand working as they should.
DOJ’s case jeopardizes these tools and risks upending the current competitive advertising ecosystem. Ironically, by targeting Google’s advertising publishing tools, the government risks entrenching other large companies that provide advertising tools, reducing competition and harming the same small- and medium-sized businesses that the DOJ claims it wants to protect. Ultimately, the government’s case threatens to break products that Google’s customers prefer and rely on to thrive and grow their businesses, and small businesses will be the first to feel the consequences.
Beyond those immediate consequences, the DOJ’s case risks chilling innovation. Google has succeeded by competing vigorously in the advertising marketplace by providing customers with a superior product. The government’s case, however, punishes Google for competing by attempting to break its advertising business and suggesting that the company has a legal obligation to do business with its competitors, which cuts against clear Supreme Court precedent. The lawsuit against Google’s ad tech sends a message to private sector businesses that success will be met with heavy-handed government intervention, discouraging small businesses and startups from investing in research and development to create new, innovative digital products and services.
The facts and the law all point in the same direction: this is a competitive market that benefits consumers, publishers, and advertisers alike. As the case proceeds toward its next steps, the courts should consider the risks that DOJ’s arguments pose to small- and medium-sized businesses, as well as the broader threats the case poses to innovation.
