Untangling Google’s Anticompetitive Tying: What the Ad Tech Ruling Means for Rivals in the Digital Advertising Market 

Written by: Joshua Koran

1. What just happened? 

On April 17, 2025, U.S. District Judge Leonie Brinkema found “that Google has willfully engaged in a series of anticompetitive acts to acquire and maintain monopoly power in the publisher ad server and ad exchange markets for open-web display advertising” (p. 114). The court found Google illegally leveraged “its tied ad tech tools to engage in a series of acts that diminished rivals’ scale, thwarted their ability to compete, and harmed customers” (p. 86).

This ruling is a major development in the 2023 lawsuit against Google brought by the U.S. Department of Justice (DOJ) and 17 states, with broad impact for publishers, advertisers, and the ad tech solution providers that connect them. 

The DOJ argued that Google abused its dominance in the ad tech stack to distort competition. Specifically, the DOJ accused Google of abusing its dominant position in three distinct ad tech product markets:

1. Publisher Ad Servers (Count I): Tools websites use to manage and sell their ad inventory. Experts found “Google had a 91% market share of the worldwide publisher ad server market for open-web display advertising as measured by the number of impressions served” (p. 73).

2. Ad Exchanges (Count II): Display ad marketplaces connecting advertisers using programmatic buying tools (e.g., DSPs, ad networks) to publishers using publisher ad servers. Experts found Google’s ad exchange’s market share of >54% was “roughly nine times larger than the share held by Google’s next-largest competitor” (p. 82).
3. However, the court said the DOJ “failed to prove that there is a relevant market for open-web display advertiser ad networks,” (Count III) since this “is not common in the digital advertising industry,” and looking only at the buy-side of ad networks ignores “the publisher-facing side of ad networks” (p. 54-55). This let the court find Google’s AdWords (advertiser-facing) and AdSense (publisher-facing) names “to be the two components of Google’s [unified] ad network” (p. 55).

The court emphasized “the true measure of monopoly power lies not in a firm’s high market share, but in its ability to maintain that share” (p. 72).

The court determined that Google’s conduct was not about refusal to deal, but about exclusionary practices—specifically, unlawfully tying its publisher ad server (DFP) and ad exchange (AdX) through “contractual policies and technological integration” (Count IV) (p. 112-114).  The ruling highlighted that Google’s exclusionary conduct allowed it to maintain and entrench its monopoly power by restricting publishers’ ability to work with rival ad tech providers and limiting real-time interoperability. 

2. What’s the Harm? 

Google’s control of both the ad server and exchange, which had exclusive access to AdWords demand, enabled Google to deny rivals the scale necessary to compete effectively, leading to higher fees, increasing advertiser costs while lowering publisher yield.  

The court reviewed extensive evidence to determine the harm to the market:  

• Locked-In Publishers: “By effectively restricting the unique advertising demand offered by AdWords advertisers to AdX, Google has ensured that publishers would lose significant revenue if they did not use AdX” (p. 96). The restrictions on both AdX demand and allowing real-time bids from rival demand sources reduced publishers’ ability to choose better or cheaper alternatives (p. 94).
• Market Entrenchment through Self-preferencing Conduct: “Google further entrenched its monopoly power by imposing anticompetitive policies on its customers and eliminating desirable product features” (p. 114). “Google limited AdX to send real-time bids only to DFP, thereby forgoing a desirable AdX feature for non-DFP publishers to entrench the firm’s monopoly power in the publisher ad server market” (p. 81). “Google’s monopolies in the publisher ad server and ad exchange markets, enhanced by the AdX-DFP tie, have enabled Google to introduce a series of anticompetitive policies, practices, and technology changes to its sell-side ad tech tools that were not in its publisher customers’ best interests. These changes [e.g., First Look, Last Look, Project Poirot, Unified Pricing] decreased product quality and harmed competition by further entrenching Google as the dominant company in open-web display advertising” (p. 98).  
• Reduced Innovation and Higher Costs: With less competition, there was less pressure on Google to innovate or lower fees, such that “AdX’s ‘20 percent’ take rate was “around double” the take rate” offered by other exchanges (p. 77).  
• High Barriers even for Well-resourced Competitors: “Google’s publisher ad server DFP has a durable and ‘predominant share of the market’ that is protected by high barriers both to entry and expansion. This conclusion is reinforced by evidence that Google has acted to degrade DFP’s features without fear that its customers would switch to alternative publisher ad servers” (p. 73). Even well-resourced competing ad solution providers struggled to attract business because Google’s illegal tying practices made it nearly impossible for them to compete on a level playing field given “Google’s scale and network effects across the open-web display ecosystem” (p. 77).

3. What’s Next? 

To address and reverse the effects of this unlawful tying (Count IV), the court has asked both parties to propose remedies that match the scale and persistent nature of Google’s conduct. The DOJ has proposed structural remedies, such as requiring Google to divest its ad tech businesses (notably Google Ad Manager, which includes DFP and AdX, see https://www.justice.gov/archives/opa/press-release/file/1563746/dl (p. 140), to break up the integration between the ad server and ad exchange markets. 

While divestiture is one option, simply moving the monopoly to another owner does not address the underlying problems. Google will need to untie the demand from AdX (i.e. AdWords) from its ad exchange (ADX) and publisher ad server (DFP) so as to remedy the harm caused by “leveraging its tied ad tech tools to engage in a series of acts that diminished rivals’ scale, thwarted their ability to compete, and harmed customers” (p. 86).

Below are four behavioral remedies that could address the harms identified by the court:

a. Mandate Open Interoperability Requirements

• What: Require Google to make its publisher ad server (DFP) and ad exchange (AdX) fully interoperable with rival ad tech solutions. Publishers should be able to plug any ad exchange into DFP and AdWords advertiser demand should be available via alternative ad exchanges to AdX (p. 94-96).  
• How it helps: Ending exclusionary conduct would enable publishers to freely choose which ad exchanges to use with Google’s publisher ad server, and vice versa, making it easier for publishers to choose alternative offerings that drive innovation and improve yield.

b. Transparency Reporting Requirements

• What: Require Google to make key auction mechanics transparent to business customers, and provide granular real-time pricing data associated with bids, not just won impressions (see p. 77). 
• How it helps: Exposing supracompetitive fees would make it easier for publishers, advertisers, and regulators to spot unfair practices, monitor compliance, and foster improved trust.

c. Ban Exclusionary Self-Preferencing

• What: Prohibit Google from giving its own ad exchange or ad server any special advantages when integrating the other components (e.g., more decision time, unfair use of rivals’ data, or other self-preferencing conduct) relative to rival ad exchanges and publisher ad servers (see p. 98).  
• How it helps: Ending discriminatory conduct levels the playing field, ensuring that Google’s products compete on their merits.

d. Anticircumvention Requirements

• What: Prohibit Google from using other dominant solutions (e.g., Search, its Chrome browser or Android OS) in a manner that disproportionately diminishes only “rivals’ scale” (see p. 86).
• How it helps: Mitigates a repeat of Google’s prior behavior with regulators, which European Commission has described as “malicious compliance,” i.e. superficially obeying in a manner that intentionally frustrates the intended effect of the intervention (https://www.politico.eu/article/european-union-digital-markets-act-google-search-malicious-compliance).

Google has announced it will appeal the courts’ ruling (https://www.reuters.com/technology/us-judge-finds-google-holds-illegal-online-ad-tech-monopolies-2025-04-17). However, regardless of the timing of the eventual remedies, what is clear is that the future of connecting media owners’ ad inventory and advertiser demand will be more competitive in the future, benefiting publishers, advertisers and consumers.