SAN FRANCISCO (Reuters) – Alphabet’s Google illegally dominates two markets for online advertising technology, a judge ruled on Thursday, dealing another blow to the tech giant and paving the way for U.S. antitrust prosecutors to seek a breakup of its advertising products.
The decision clears the way for a hearing at another trial to determine what Google must do to restore competition, such as sell off parts of its business. That trial has yet to be scheduled.
LEONIE BRINKEMA, U.S. DISTRICT JUDGE FOR THE EASTERN DISTRICT OF VIRGINIA, IN ALEXANDRIA
“In addition to depriving rivals of the ability to compete, this exclusionary conduct substantially harmed Google’s publisher customers, the competitive process, and, ultimately, consumers of information on the open web.”
GIL LURIA, ANALYST AT D.A. DAVIDSON
“The U.S. Department of Justice is focused on breaking up all of Google’s monopolies and it does not look like they are going to let up. The best course of action would be for Google to proactively spin off some of its businesses in order to address the DOJ’s concerns. That may include the ad network business, Chrome and Android. We believe a breakup of Google would create a significant amount of shareholder value, as the sum of the value of their individual businesses is far greater than where the stock is trading now.”
MICHAEL ASHLEY SCHULMAN, CHIEF INVESTMENT OFFICER AT RUNNING POINT CAPITAL
“While Google’s advertising business has long been a pillar of its financial strength, this ruling threatens to dismantle its integrated control over digital advertising, forcing either operational changes or outright divestitures. The risk of a forced breakup — once viewed as remote — is now materially higher, placing significant pressure on Google’s long-term margins and growth outlook. Investors will have to recalibrate their assumptions around Google’s advertising dominance, likely leading to greater earnings fog and a valuation reset.”
“The ruling against Google marks a watershed moment for Big Tech regulation. It raises real risks of a breakup of Google’s ad business and signals that U.S. courts are now open to structural remedies, not just fines. Investors should expect higher regulatory risk premiums across the tech sector, putting pressure on valuations just as fundamentals are already weakening.”
“A federal judge’s finding that Google illegally monopolized the ad tech market is a major inflection point for the company and the broader tech sector especially since the Trump administration was expected to be FTC-light when compared to the Biden administration.”
