Google lost to the Justice Department twice in the last 12 months and was ruled a monopolist in both its search and ad tech practices; while the final shoe has yet to drop in the latter case, observers feel it got off lightly.
That’s because, in both cases, Google avoided forced divestiture of its industry-dominant web browser Chrome and its market-leading ad exchange and ad server, with judges opting instead for behavioral remedies.
In the latter case, the parties are understood to be in negotiation over final behavioral remedies – these are expected in the coming days – but for many industry observers, the results have been deeply disappointing.
Big Tech won desktop and mobile #
According to media observers, such outcomes – including regulators’ efforts to curb fellow Big Tech cohorts, such as Amazon, Apple and Meta – are indicative of how platforms have “already won the world of web and mobile,” with many theorizing how lessons can be learned, especially as the industry enters the AI era.
Whether this means outfits such as the DOJ or the European Commission placing the AI-driven advertising offerings of Amazon, Google and Meta, the three-largest companies when it comes to pocketing advertising spend, remains to be seen. However, the consensus is that the industry needs further scrutiny as it defaults to automated settings.
Alan Chapell, a privacy attorney and regulatory analyst who co-hosts The Monopoly Report, told Digiday that certain parties felt the DOJ, in an effort to appear more business-friendly, proposed a structural remedy that was ultimately too complex.
Complexities still need resolution #
Per Chapell’s assessment, several things would likely need to happen before another major antitrust challenge to Google emerges, even as the AI era sees ad spend further consolidate within its coffers.
For example, some of the issues that were unearthed as part of the ad tech antitrust case – such as “Red State,” Google’s initiative to lower the bid prices of rival ad exchanges, and “Jedi Blue,” i.e., its quid pro quo agreement to give Meta preferential auction advantages to reduce support for rival ad tech – must be resolved first.
Furthermore, Europe is still working through its existing competition case against Google’s sell-side ad tech, with regulators in Brussels, the center of EU political power. Ultimately, the near-to-mid-term future will depend on the makeup of U.S. political leadership, noted Chapell. He further added that EU parties may be wary of antagonizing the existing U.S. administration, which has consistently backed homegrown companies amid interference on foreign soil.
“I don’t see anything coming from the current administration,” he noted, adding that even potential changes in the other branches of U.S. government after this year’s midterm elections are likely to move the dial significantly.
The AI-transformation takes hold #
For some, the questions surrounding Google’s ad tech business are moot, especially as uncertainty also remains about how committed Google is to its network business, i.e., its ad tech unit that contains Google Ad Manager, given this is the sole area of its business undergoing revenue decline. Regardless, Google’s ad offering is transforming amid the media industry’s AI revolution, including the expansion of its AI Max advertising product beyond search into shopping and travel and new automation controls that shift advertiser workflows from manual keyword management to intent-based, prompt-driven campaign optimization.
Several sources Digiday approached said regulators on either side of the Atlantic should scrutinize these areas.
According to James Rosewell, co-founder of the pressure group Movement for an Open Web and a prominent Google critic, Google’s AI Commerce platform is likely to draw major attention from antitrust regulators worldwide.
“Google has the ability to leverage its existing dominance in a whole range of areas from payments and email through to search and browsers, in order to monopolize agentic commerce,” he said in a written statement. “We can already see with products like Universal Commerce Protocol and Universal Cart that they’re building an infrastructure of dominance across the AI commerce value chain. The EU needs to get ahead of this and use the Digital Markets Act to ensure that competition is preserved.”
Rosewell further argued that European regulators should impose safeguards around data separation, interoperability, access and ranking transparency to prevent European businesses and consumers from becoming overly dependent on U.S. Big Tech as the market develops.
More AI = More ad tech tax? #
TAU Marketing Solutions’ Robert Webster noted that Google recently started automatically upgrading Search campaigns to AI Max, a system that prioritizes broad reach and automated query expansion over advertiser precision and transparency.
For Webster, a leading voice on how AI is reshaping the economics of the online media industry, this is a case of “Google upping the Google Tax” – a phenomenon that’s likely to raise the ire of government authorities – as the Google platform now blends channels, whereas budgets have historically been allocated separately. However, with Google’s AI and Performance Max, a single campaign can straddle search, YouTube, display, Shopping, etc., with its measurement system then in place to “prove it works better” than other channels, which is likely to draw budget from rival offerings, such as independent demand-side platforms or publisher-direct deals.
Using AI to mask anti-competitive behavior? #
Of course, winning ad spend at rivals’ expense does not break any antitrust laws, especially if it delivers best-in-class results. However, Google’s critics found cause in the recent ad tech case, alleging “tying or self-preferencing,” and worry that AI-first platforms may be used to mask such conduct.
“It’s making the controls less visible to most advertisers and most buyers,” said Webster, observing the latest Google platform updates. “The controls are still there, hidden in the background, but they’re getting harder to use and harder to see.”
However, Google advocates are likely to argue that the rapidly developing nature of the technologies means its product suite is constantly being updated to suit market needs.
For example, Google claimed it was already one step ahead of calls to let publishers opt out of their content being used in AI Overviews without affecting their general search rankings, after the U.K.’s competition authority proposed conduct requirements. Meanwhile, Google has long been at pains to point out that much of its refusal to share data, or inventory access with rivals has been governed by its obligation to protect the privacy of its extensive user-base – often the ace up its sleeve when competition criticisms are aired.
CTV next? #
Regardless of all the headlines surrounding AI, and disappointment over attempts to curb Google’s dominance of desktop and mobile advertising, TAU’s Webster believes antitrust authorities should not overlook CTV.
“It’s going to be very, very hard for broadcast TV to survive against YouTube over a prolonged period of time,” he said, citing the Google-owned streaming service’s ability to offer advertisers both the identity and measurement capabilities to unlock significant amounts of spend.
Ahead of the confirmed behavioral remedies to come out of the ad tech antitrust case, some believe Google could potentially exploit ambiguities in behavioral remedies, i.e., abide by the letter of the law, but not its spirit.
That might include Buyer Direct leveraging GAM without AdX; applying remedies narrowly to display rather than areas such as CTV; requiring privacy-enhancing technologies as a condition for data or third-party-cookie access. The latter prospect would effectively amount to the reintroduction of an updated version of Privacy Sandbox – a concern taking place elsewhere in the industry.
Google could also comply with remedies technically while frustrating their intent — making mandated integrations more difficult or expensive, degrading data provided for interoperability, or otherwise increasing implementation costs.
“They sort of make it much harder for anybody outside of Google… to actually know what’s going on under the hood,” said Chapell, pointing out how similar issues have arisen in the search case. “What they’ll do is point, and say, ‘Oh, well, you weren’t able to meet this particular standard… because you weren’t able to meet that standard, you don’t get access to data, but we do’.”
So, as the industry nears resolution on the long-running ad tech antitrust case, whether any such conduct ultimately triggers judicial intervention or renewed DOJ action will, ultimately, depend on how aggressively regulators interpret and enforce the remedies.
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