Court is adjourned: The remedy phase of the Google ad-tech antitrust trial has wrapped.
Over the course of about two weeks, lawyers for both Google and the US Department of Justice were in a federal courthouse in Alexandria, Virginia, to discuss potential remedies to address Google’s illegal ad-tech monopoly. The DOJ has asked the court to consider remedies like open-sourcing the logic behind how Google’s publisher ad server decides which advertisements to show and a divestiture of Google’s ad exchange, AdX; Google has proposed behavioral remedies like enabling publishers to use ad servers not affiliated with Google to access AdX demand.
At times, the testimony got incredibly technical, with US District Court Judge Leonie Brinkema listening to witnesses discuss the technical feasibility and economics of a potential divestiture.
“There’s been quite a lot of valuable information surfaced,” Andrew Frank, research VP and distinguished analyst at Gartner, told Marketing Brew after the first few days of the remedy phase. “They’re really getting into the nitty-gritty.”
Two sides to every story: Google’s proposed remedies are a “nonstarter,” Ari Paparo, co-founder and contributor at Marketecture Media, told Marketing Brew. The company’s proposed remedies, he said, don’t address the role of AdWords (now called Google Ads) in the equation.
“If you don’t want to change the dynamic, that’s one way to do it,” Paparo told Marketing Brew.
In contrast, Paparo called the DOJ’s remedies “probably a little more meaty, [but] they seem like overreach.” That’s partially what Google argued during the remedy phase, looking to poke holes in the feasibility of the DOJ’s proposals and arguing that one potential remedy, which could include open-sourcing its publisher ad server’s final auction logic, is simply too difficult.
Untangling ad tech can be difficult, and Paparo said there was “very convincing testimony that the DOJ’s written proposal is nonworkable.” The testimony “got into the specifics of what the DOJ said they wanted, versus the reality of how it works and how much data would have to be transferred back and forth, and effectively how much risk there would be to implementing this proposal.” Frank noted that there also appeared to be a disconnect in court about “whether publishers [would] benefit from a more competitive marketplace, or whether Google is actually their best option at this point.”
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In terms of what could happen next? “I think it’s very unlikely the DOJ gets what they asked for here, but they may get a very slimmed-down version of something around this,” Paparo said.
Going once, going twice: Another question that came up during the remedy phase: If Google were forced to sell off AdX, as the DOJ has proposed, would there be an appropriate buyer?
The buyer wouldn’t necessarily have to be another ad exchange, although that is the “obvious answer,” Paparo said; it could instead be a private-equity firm, another business that works with publishers, or a Big Tech firm, he theorized, citing Oracle’s involvement in the potential US TikTok deal.
You be the judge: Of course, the decision is now in the hands of Judge Brinkema. While no one knows what the judge is actually thinking, Frank observed that she seemed “truly interested in understanding last-bid dynamics and prebid, which is pretty arcane.” Paparo predicted that she might be less inclined to force a divestiture because she seemed “very sympathetic to the end user, which is the publisher in this case,” and any changes that “might hurt them”—many of whom have already argued during earlier parts of the trial that their businesses have been harmed by Google’s ad-tech dominance—could be off the table.
“I think Google’s engineering managers gave a pretty convincing case that this change [would be] disruptive and dangerous,” he said.
Even if Google is forced to divest, though, Frank doubts “it’s by any means a fatal blow” for the tech giant.