The future of Google’s adtech business is being decided in a federal court in Virginia.
In April, a federal judge ruled that Google violated U.S. competition law by maintaining an illegal monopoly of two key adtech markets: ad servers (represented by Google DFP, or DoubleClick for Publishers) and ad exchanges (represented by Google AdX).
Over the last two weeks, more than a dozen witnesses gave testimony to help determine how Google will be required to remedy this monopoly, the last stage of a landmark antitrust trial against the search giant.
Judge Leonie Brinkema of the U.S. District Court for the Eastern District of Virginia heard from expert witnesses produced by both Google and the U.S. Department of Justice. In the coming months, she is expected to determine what behavioral and possible structural changes Google will need to make to dissolve its monopoly in ad servers and ad exchanges. These hearings ended Monday.
The DOJ has urged the judge to require a divestiture of AdX and wants to require Google to open-source its auction logic—the algorithms that determine where ads are served. If this isn’t a viable option, the DOJ is calling for the ad server, DFP, to also be spun out.
Google believes the DOJ’s proposals go too far. Instead, the Alphabet-owned company has suggested a handful of simpler changes to its business practices, like making real-time bids from AdX visible to all rival ad servers, allowing publishers to set different price floors for different bidders in Google Ad Manager, and agreeing not to engage in ‘first look’ and ‘last look’ practices that may give it an advantage in open web auctions.
Here are the five topline takeaways from the hearings.
Google declined to comment for this story.
1. Google admitted that an AdX spin-off is doable
After arguing in its initial defense that the forced separation of AdX from the Google adtech stack would be too technically complicated, would take up too much time and resources, and would come at the detriment of advertisers and publishers, the general manager of Google Advertising, Tim Craycroft, admitted in testimony that the company had determined that a spin-off is in fact technically feasible.
Craycroft revealed on Sept. 25 that Google conducted a series of internal tests to evaluate the possibility of an AdX divestiture. An initiative dubbed Project Sunday was undertaken to assess the possibility of a spin-off of AdX as well as DFP. The subsequent Project Monday sought to evaluate the possibility of an AdX axing. Google ultimately concluded that divestiture was possible.
The DOJ has argued that a forced divestiture of AdX is technically possible and that it is a necessary move to inhibit Google from coming up with other ways to disadvantage publishers.
