Antitrust trial begins, Google’s advertising business faces threat of breakup

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According to media reports on Monday, Google is facing a new challenge from U.S. antitrust authorities, as the U.S. Department of Justice seeks to force it to sell its core online advertising business. The trial, which opened Monday in Alexandria, Virginia, will determine whether the tech giant will be required to divest its ad trading platform, AdX.

The Department of Justice and a coalition of multiple states are demanding that Google sell its ad trading platform AdX, which charges online publishers a 20% fee for ad auctions conducted as users load websites. The government is also seeking to have Google open-source the bidding mechanism code for its ad auctions.

It is worth noting that presiding Judge Leonie Brinkema ruled in April that Google holds an illegal monopoly in online ad technology. After this week's trial concludes, she will decide what remedies will be imposed on the company.

This case is part of a bipartisan U.S. crackdown on Big Tech companies that began in Trump's first presidential term, with cases against Meta, Amazon, and Apple still pending. The lawsuit against Google is seen as the government's next-best chance to curb its monopoly power after previous efforts to force the company to sell its Chrome browser failed.

Government Seeks to Split Up Core Advertising Business

The core request of the Department of Justice is to compel Google to sell the AdX ad exchange platform, which forms an important part of Google's advertising business, running real-time ad auctions when users visit websites, and charging publishers a 20% service fee.

The government is also requesting that Google open-source its auction algorithm to increase transparency and promote competition. These demands stem from an earlier ruling in which the judge found that Google had illegally tied its publisher ad server to the AdX platform, forcing publishers to use its services.

Last year, the Department of Justice already convinced Judge Brinkema that Google had illegally bundled its publisher ad server (the platform that sites use to store and manage digital ad inventory) with the AdX platform, forcing publishers to use its services.

Google Proposes Policy Adjustment as Alternative Solution

Facing the threat of a breakup, Google has proposed alternative solutions. The company suggests changing its policies to make it easier for publishers to use and support competing platforms, rather than selling AdX.

Google argues that the Department of Justice's proposal is technically unfeasible and would create long-term uncertainty for advertisers and publishers. The company asks Judge Brinkema to take a cautious approach similar to that of the Washington, D.C., judge who recently rejected most of the Department of Justice's proposals in another lawsuit involving Google's search monopoly.

Last year, during private negotiations with the EU over an antitrust probe, Google once proposed selling AdX, and Google's internal research on this potential sale could appear as evidence in this week's trial.

Several industry executives are expected to testify at the trial, including former News Corp executives and executives from DailyMail.com and Advance Local. Advance Local operates local news media in eight states. Some of these witnesses already testified last year when the Department of Justice successfully convinced Judge Brinkema that Google had locked publishers into using its ad server platform through illegal bundling strategies.

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