Google will have to change the way it operates some of its key digital advertising tools, opening up its bidding processes to competing platforms, and will be subject to years of scrutiny, according to a full ruling by Judge Leonie Brinkemareleased on September 16 in the US government's major antitrust case against Google.
The 106-page ruling does not ultimately mandate the breakup of Google's advertising business or the sale of AdX, despite the US Department of Justice's request. Instead of a structural "breakup" of the business, the court opted for a set of behavioral measures aimed at giving publishers more choice and limiting Google's ability to favor its own tools.
Six years of oversight for Google
The new measures will remain in effect for six years, a period that Google itself had proposed, while the Department of Justice and the states involved in the case had requested a duration of 15 years. The judge, however, reserves the right to extend the implementation period if it is determined that the objectives of the decision have not been achieved.
At the same time, the presence of a compliance supervisor and a technical committeeto monitor the implementation of the changes. The Ministry of Justice states that the oversight mechanism will have an important role in enforcing the requirements of the final court decision.
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This choice also shows the court's distrust of the possibility that simple commitments from the company would suffice. Brinkema referred to the need for substantial supervision, ultimately choosing measures that interfere with the way the products operate rather than the sale of key parts of the advertising activity.
AdX and DFP disconnection
At the heart of the decision is the relationship between AdX and DFP, two of Google's key tools for buying digital advertising. The court order aims to stop the mandatory linking of the two services, allowing publishers to use other ad servers without being blocked from accessing AdX demand.
AdX should also bid on competing publisher ad servers on terms that do not favor Google's own products. In this way, the auction process should become more open to alternative platforms.
The role of Prebid and more data
Of particular importance is the requirement to interface AdX and DFP with Prebid, a widely used open source header bidding framework. This technology allows publishers to search for competing bids from different sources before finally selecting an ad.
At the same time, Google will have to provide publishers with more data about auctions, including information about winning and losing bids. There will also be more transparency around how DFP selects the winner of an auction. The Justice Department argues that these measures will make it easier for publishers to evaluate their options and move to competing providers.
Why it matters to publishers
The changes don't just affect Google and its competitors. They directly affect the market in which news sites, apps and other digital publishers, which rely on the automated buying and selling of advertising space.
See also: Google seeks to avoid breaking up AdX technology
In a more open environment, publishers can theoretically access more sources of demand and better compare bids. Greater transparency in auction data can also help them better understand how their revenue is generated and what factors determine the final choice.
The practical implementation, however, will be crucial. The outcome will depend not only on what the decision provides, but also on whether the new technical interconnections and non-discrimination rules will be effectively implemented.
Google retains AdX
Brinkema rejected the demand to sell AdX, while also rejecting the request to open source the DFP auction algorithm. The court ruled that behavioral measures can, under the specific circumstances, address competition concerns without requiring a break-up of the business.
Another important element is that the rules have global application. The judge did not accept the view that the changes should be limited to the US market only, noting that their application on a global level leads to uniform changes to Google's products.
The case is gaining international proportions
The US decision comes at a time of increased regulatory pressure on Google in Europe. The European Commission has already fined Google €2.95 billion for online advertising and has called for changes to address conflicts of interest in the ad tech chain.
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Thus, the decision of the American courts adds another important chapter to the international debate on how large platforms should operate when they simultaneously control many different stages of a digital market.
For Google, the next critical step is now to implement the measures in practice and comply with multi-year oversight. For publishers and its competitors, the focus will be on whether the new rules will actually translate into more choice, greater transparency and different terms in digital ad auctions.
