Written by: Haim Ravia, Dotan Hammer
The U.S. Federal District Court for the Eastern District of Virginia issued a Memorandum Opinion in the antitrust case brought by the United States and seventeen states against Google LLC. The Plaintiffs claimed Google monopolized digital advertising technology markets and unlawfully tied its products under the Sherman Act. After a three-week bench trial, the Court reached several key findings. The Court found that Google violated the Sherman Act by willfully acquiring and maintaining monopoly power in two specific markets.
The first is the open-web display publisher ad server market. The Court found Google’s Doubleclick for Publishers (DFP) product had a durable and predominant share (around 91% worldwide) protected by high barriers to entry and expansion.
The second is the open-web display ad exchange (AdX) market. The Court found Google’s AdX product was dominant, charged durable and supra-competitive prices (a 20% take rate), and maintained a significant market share (estimated 54-65% worldwide), also protected by high barriers to entry and expansion.
The Court also found that Google unlawfully tied its publisher ad server (DFP) and ad exchange (AdX) in violation of the Sherman Act. The Court found that Google’s technical and policy restrictions effectively compelled publishers wanting access to AdX’s unique advertising demand to use DFP, thereby insulating DFP from competition and contributing significantly to maintaining Google’s monopoly power.
The Court found that Google’s procompetitive justifications for its conduct were insufficient or outweighed by the anticompetitive effects.
The case will now proceed to the remedies phase, where the court will determine what corrective measures should be imposed. In another court case, Google was found liable for monopolizing the search engine market. A similar remedy decision in that matter is pending as well.
Click here to read the U.S. Federal District Court for the Eastern District of Virginia decision in U.S. v. Google.
