(Bloomberg) — The US Justice Department asked a federal judge on Friday to force Alphabet Inc.’s Google to sell key parts of its advertising technology and share realtime data with competitors to address a ruling that the technology giant illegally monopolizes much of the market for placing ads around the web.
The government wants the company to divest software used by websites to sell ads, known as a publisher ad server, as well as the exchange used to match buyers and sellers of online display ads. The DOJ argued for a phased approach that would first require Google to provide real-time bidding data from its ad exchange to competing publisher ad servers.
The DOJ made the request in a Virginia court Friday during a hearing involving Google’s advertising operations. The government is also in trial against the company in a separate case in Washington focused on Google’s dominance in search.
US District Judge Leonie Brinkema, who’s presiding over the case, set a Sept. 22 date to hear proposals to address competitive harm she found in Google’s advertising business. On May 5, the two sides will submit formal detailed proposals.
Brinkema appeared skeptical that there was a need for Google to sell the ad server, which was developed out of its 2008 purchase of DoubleClick. The judge asked several times during the hearing whether a sale of the advertising exchange, along with the bid data sharing, would address her ruling that Google acted anticompetitively.
Google and the government were largely in alignment on providing real-time data access, but the company pushed back on the need for any divestitures, calling it infeasible and disruptive.
Revenue from Google’s network business, in which it serves up ads on other parts of the Internet, have been declining in recent quarters, suggesting the business may be of diminishing importance to the tech giant going forward.
The Justice Department told Brinkema that the divestitures are essential to ensure Google doesn’t revert to illegal conduct in the future. The government said it’s hard to anticipate every way “a recidivist monopolist like Google” will try to dominate a market, DOJ attorney Julia Tarver Wood told the court.
“Today the DOJ conceded Google’s proposed ad-tech remedy fully addresses the Court’s decision on liability,” said Lee-Anne Mulholland, Google’s vice president of regulatory affairs, in a statement after the hearing. “The DOJ’s additional proposals to force a divestiture of our ad-tech tools go well beyond the Court’s findings, have no basis in law, and would harm publishers and advertisers.”
Last month, Brinkema ruled that Google violated antitrust law in the markets for advertising exchanges and tools used by websites to sell ad space, known as ad servers. But she said the company didn’t meet the definition of a monopoly for a third market of tools used by advertisers to buy display ads. She also ruled that Google illegally required web publishers to use its ad server if they wanted the full benefits of its advertising exchange.
Brinkema’s decision marked the second time in a year that Google was found by a court to be an illegal monopolist. A trial began last month in Washington on a fix to address a ruling that the company monopolizes the online search market. The Justice Department is seeking to force Alphabet to sell off its Chrome browser, among other changes.
Brinkema’s ruling, however, could make divestitures a tough sell in her case, since she found that a pair of Google acquisitions — DoubleClick in 2008 and AdMeld in 2011 — weren’t anticompetitive on their own, despite DOJ arguments to the contrary. Those two companies comprise key parts of the publisher-side software the DOJ wants Google to sell.
Google is latching onto that element of Brinkema’s ruling to argue against any asset sales at all. It also argues that its ad exchange does much more than facilitate the “open-web display advertising” at issue in the case because it includes mobile and video ads — meaning that a divestiture would be far broader in scope than the ruling allows.
At the hearing, Brinkema also urged the DOJ and Google to settle the case out of court, citing rapid technological developments including artificial intelligence as well as the changing political and economic environment, saying they “should think about a mediator.”
(Updates from second paragraph with details from the hearing.)
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