On day three of Google’s ad tech antitrust trial, Judge Brinkema asked witness Jed Dederick, CRO at The Trade Desk, about the advantages to buy-side and sell-side players of Google’s scale and concentration of data. Specifically, Judge Brinkema wanted to know whether life would get more difficult for any other industry participants if Google’s ad tech business was “blown apart”.
While the case is still in its early stages, the prospect of breaking up Google’s ad tech business is clearly on the judge’s mind. This is one of the remedies requested in the original complaint filed against Google – specifically that Google would be forced to divest the Google Ad Manager suite including its publisher ad server and AdX. Judge Brinkema is not required to accept this request, even if she rules that Google has violated antitrust law, but it’s clearly a very real possibility.
While Judge Brinkema’s question suggests she’s considering the possibility of forcing a breakup of Google’s ad tech business, it also shows she’s mindful of the potential negative consequences of such a move.
The biggest product sunset in software history?
One potential issue is that Google’s sell-side ad tech business is so big, it might struggle to find a buyer if forced to separate from the rest of the company.
Forrester senior analyst Mo Allibhai, who covers ad tech and media, said that “absent Alphabet’s financial largesse, Google’s SSP may be “too big to survive […] Given current capital constraints and lending conditions, there is a possibility that no buyer will come forward.”
If this is the case, Google might be forced to consider “the largest product sunset in the history of software”, according to Allibhai. The Department of Justice argues that Google’s dominance of the publisher ad server business has helped Google gain unfair advantages for it’s AdX and buy-side businesses, thus remaining valuable to Google. But spun off from Google, the ad server would have less value, again making it hard to find a buyer.
Allibhai noted Amazon’s decision to shut down its own ad server, having decided that the revenues and margin growth weren’t enough to justify the costs. The Trade Desk’s Dederick acknowledged that finding a viable alternative ad server could be an issue for publishers.
However, any concerns are unlikely to take the prospect of a Google break-up off the table, partly because that decision doesn’t just hinge on this case’s ruling. It can be easy, given the volume of action on both sides of the Atlantic against the tech giants, to remember what has and hasn’t been decided in each individual case and investigation. But in Europe, gears are already in motion to split up Google’s ad tech business.
Just last Friday, the UK’s Competition and Markets Authority provisionally concluded after an investigation that Google has abused its alleged dominant position in the ad tech market. Previous filings from the CMA have proposed breaking up parts of Google’s business as a solution. Google has a right to reply, so it will take a while before there’s any final decision from the CMA, but forcing a divestiture is certainly on the cards.
Similarly the European Commission, at the start of 2023, filed a statement of objections against Google practices in ad tech. Again, these findings were preliminary. But in its announcement, the Commission said that it believed behavioural remedies were unlikely to be effective against Google. “The Commission’s preliminary view is therefore that only the mandatory divestment by Google of part of its services would address its competition concerns,” read a statement released by the Commission.
