(Bloomberg) – The U.S. Department of Justice asked a federal judge on Friday to force Alphabet Inc.'s Google to sell key parts of its ad technology and share real-time data with competitors to resolve the ruling that the tech giant illegally monopolizes most of the market in order to place ads on the web.
The government wants the company to divest the software used by the website to sell ads, called publisher ad servers, and exchanges used to match buyers and sellers of online display ads. The Justice Department advocates a phased approach that will first require Google to provide real-time bid data from its advertising exchanges to competitive publisher ad servers.
The Justice Department filed a request in a Virginia court at a hearing on Google's advertising business on Friday. The government is also trying the company in another Washington case, with the focus on Google's dominance in search.
U.S. District Court Judge Leonie Brinkema, who presided over the case, set a September 22 date to hear proposals about competitive injuries she found in her Google advertising business. On May 5, both sides will submit formal detailed suggestions.
Brinkema seems to have a need for Google to sell ad servers, developed by purchasing DoubleClick in 2008, which was sold by Google. The judge asked several times during the hearing whether the sale of the advertising exchange and whether the bid data sharing would resolve her ruling, namely Google's role in the protest.
Google and the government are basically aligned in providing real-time data access, but the company rejected the need for any divestitures, saying it is not feasible and destructive.
The revenue from Google's web business, which serves advertising in other parts of the internet, has been declining in several recent places, suggests that the business may be less important to the technology giant.
The Justice Department told Brinkema that divestitures are crucial to ensuring that Google does not resume illegal activities in the future. Julia Tarver Wood, a lawyer at the Justice Department, told the court that the government said it was difficult to foresee that “reclining monopolists like Google” would try to dominate the market.
“Today, the U.S. Department of Justice acknowledges Google's proposed AD-TECH remedies that completely resolve the court's ruling on liability,” said Lee-Anne Mulholland, vice president of regulatory affairs at Google. “Other recommendations from the Department of Justice forcing our advertising technology tools to divest far beyond the court's findings, have no legal basis, and will harm publishers and advertisers.”
Last month, Brinkema ruled that Google violated Antrust laws in the market for tools used by advertising exchanges and websites to sell ad spaces called ad servers. But she said the company has no monopoly definition of a third tool for advertisers to buy display ads. She also ruled that if Google wants the full benefits of its advertising exchange, it illegally requires Web Publishers to use its ad server.
Brinkema's decision marks the second time in a year Google was found to be an illegal monopoly by a court. A trial began in Washington last month to resolve the company's ruling to monopolize the online search market. The Justice Department is seeking to force letters to sell their Chrome browser, among other changes.
However, Brinkma's ruling may surrender her case, as she found that a pair of Google's acquisitions (DoubleClick in 2008 and Admeld in 2011) were not anti-competitive in itself, although DOJ would not. The two companies form a key part of the publisher-side software, and DOJ hopes Google will sell it.
Google is locking in Brinkema's ruling against any asset sales. It also argues that its advertising exchanges do more than just promote the controversial “open display advertising” in the case, as it includes mobile and video advertising, meaning that the scope of divestiture is wider than what dominance allows.
At the hearing, Brinkema also urged the Justice Department and Google to appear in court to resolve the case, citing rapid technological developments, including artificial intelligence and the ever-changing political and economic environment, saying they “should consider mediators.”
(Update of the second paragraph and details of the hearing.)
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