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On the third day of the Justice Department’s ad tech case remedies trial against Google, Judge Leonie Brinkema highlighted a central issue: trustworthiness. During testimony from a DOJ expert, Brinkema posed a hypothetical question: could the problems be solved if she imposed a strict order modifying Google’s conduct, provided there was assurance that Google would fully comply?
This question struck a chord, considering the events of Google’s trial last year that Brinkema adjudicated. Over three weeks, the DOJ cited several instances where Google employees allegedly used chat messages strategically to prevent leaving discoverable evidence. Brinkema later described this as a “systemic disregard of the evidentiary rules.” Although she chose not to penalize Google for its lax evidence preservation, she cautioned that her decision should not be viewed as approving such behavior.
Brinkema is soon expected to decide on measures to address the monopoly she determined Google holds in ad tech, with her decision potentially relying on whether she believes Google will adhere to the regulations this time.
Google’s proposed remedies involve a court order to prohibit specific business tactics and to require engaging in the ad auction process in a way similar to competitors. However, the DOJ contends this allows Google to potentially monopolize the market again. The DOJ advocates for removing power from Google entirely by spinning off its ad exchange AdX and partially open-sourcing or selling its DFP tool for web publishers.
For the second time in a few months, a judge faces consideration of splitting up Google. In a different case regarding Google’s search monopoly, Judge Amit Mehta chose not to break up the company, instead opting for less severe remedies like banning anticompetitive tactics and data sharing. The facts leading Mehta to this decision, the government argued in its opening statement, do not apply in this case. Brinkema’s ruling could offer insight into whether other judges share Mehta’s cautious approach as more cases against large tech companies move toward trial.
“The devil is in the details”
On Friday, with the DOJ still presenting its primary case, Google’s lawyers were already emphasizing their main argument: the government is underestimating the complexity and risk of its demands. Google advertising executive Tim Craycroft described the DOJ’s suggestions as “naive” and “incoherent.” By midweek, this argument appeared to gain traction with the judge. During the testimony of Jonathan Weissman, the DOJ expert on the technical feasibility of a breakup, Brinkema noted how changing Google’s ad tech tools could make user experience more cumbersome, likening it to replacing car tires resulting in a bumpier ride.
But during Craycroft’s testimony, Brinkema appeared to entertain an even more extreme option the government hadn’t asked for: shutting down AdX altogether. This was apparently something Google itself considered within the past few years in an analysis it called “Project Monday,” Craycroft said.
“Why is that not a very simple and elegant solution?” Brinkema asked, after Craycroft noted that another Big Tech company could buy AdX and create its own monopoly. Though several ad exchanges exist today, the court found they’ve been denied a level playing field because of tactics like reserving full real-time bidding access to Google’s huge advertiser base through its own tools. Publishers testified in the liability trial that made it nearly impossible to leave, even though AdX was charging a supracompetitive take rate of 20 percent on transactions. Craycroft told the judge that deprecating AdX could be an elegant solution, but that would also get rid of other helpful features in the product.
Brinkema made clear she wants to learn what’s actually possible, as she considers options for leveling the playing field without harming publishers and advertisers who rely on Google products.
Google found a so-called business divestiture of AdX would be feasible within two years, Craycroft said, including offloading IP, moving customer contracts, and providing reference code to guide the buyer through duplicating product functions in its own systems. But he stressed Google couldn’t realistically provide source code guaranteed to work in an unknown buyer’s tech stack, as the DOJ requests. Former Facebook capacity engineer Goranka Bjedov, who helped migrate Instagram and WhatsApp during their acquisitions, testified that the reference source code would be sufficient for a full migration. If Brinkema finds a divestiture is possible, she’ll have to decide if she trusts Google enough not to force one.
Even after helping Google’s attorneys craft their remedies proposals, Craycroft told DOJ attorney Matthew Huppert that he could not commit to lowering AdX’s 20 percent take rate, which the judge had ruled to be above a competitive level, and said a tie between DFP and access to AdX real-time bidding, a sticking point for publishers, was “just how the product was built.”
The answer to Brinkema’s question about trust wasn’t necessarily reassuring for Google. Robin Lee, the Harvard economist she asked, said the problem was how many different ways Google could get around the intentions behind a court order. Lee said there’s an almost unpredictably exhaustive list of methods for tilting the scales in Google’s favor, and it’s got every incentive to take them.
Longtime Google critics were disappointed after Mehta’s ruling didn’t include a breakup. If Brinkema reaches a similar conclusion, The Trade Desk Chief Revenue Officer Jed Dederick testified, “I think there will be a sense that they got away with it.”