Key facts
- A federal court rejected the Department of Justice's proposal to break up Google's advertising business.
Courts are hesitant to force breakups of major tech companies, even in strong antitrust cases, setting a precedent that could impact future litigation against Apple and Amazon. Google expressed satisfaction with the outcome.
The court's decision and the reasoning behind it signal a significant hurdle for antitrust regulators seeking to break up major technology companies, potentially shaping the future of competition law enforcement against Big Tech.
A federal court has rejected the Department of Justice's proposal to break up Google's advertising business, a decision that reflects a broader judicial skepticism towards forcing divestitures in the technology sector. Google expressed satisfaction with the ruling, with Lee-Anne Mulholland, vice president of regulatory affairs, stating the court rejected the DOJ's proposal to dismantle tools that help small businesses reach customers.
Last year, Judge Brinkema ruled that Google had violated antitrust laws by linking its ad exchange, AdX, with its ad sales manager, thereby making publishers dependent on the company's services. The Wednesday decision focused on whether to implement a structural breakup or less severe remedies, such as mandating equal access to certain AdX features for competitors.
Commentators noted that a breakup was a strong possibility in this specific case due to the ad exchange being a distinct product that could be more easily separated than other Google operations. However, courts have historically been hesitant to order such drastic measures, with AT&T being the last major tech company broken up by a court in 1982. The federal government's unsuccessful attempt to break up Microsoft in the late 1990s and early 2000s also looms large.
Brian Albrecht, chief economist at the International Center for Law & Economics, suggested that courts are generally unwilling to impose structural remedies in complex, intertwined markets, favoring more 'technocratic behavioral remedies' instead. The government's two failed attempts to secure structural changes against Google are expected to set an informal precedent for upcoming antitrust cases, including those against Apple for an alleged monopoly in the smartphone market and Amazon for abusing its position as an online retailer.
Former FTC Chair William Kovacic commented that the opinions from judges Mehta and Brinkema, who have carefully considered these issues and concluded that a breakup was not sensible, will be influential for judges in other high-profile tech antitrust cases.