Google’s empire of display advertising is under coordinated assault on both sides of the Atlantic as the European Commission levied a $5 billion fine and the U.S. Department of Justice moved to structurally schism key parts of the company’s ad tech stack. Cumulatively, the actions aim at the same purported harm: that Google has wielded its power over tools for buying, selling and auctioning display ads to tip the open web’s market in its favor.
What the EU decided
The European Commission found that Google had unfairly used its position in the interlocking markets for publisher ad servers and ad exchanges, where ads are bought and sold in a fraction of a second. Regulators painted the fine as more than a one-off punishment, calling the behavior itself one that produced inherent conflicts of interest that increased costs to advertisers and lowered revenues for publishers — costs that ultimately flow to consumers.
Brussels also cited Google’s record. The new fine adds to a pair of previous EU rulings against the company involving shopping search, Android tying and search advertising exclusivity, which contained penalties of more than €1 billion. Consistent with that trend, the Commission has suggested that money in and of itself will not solve the ad tech issue, giving Google a small period of time to suggest potential remedies and noting that a structural fix — as in, the company selling off pieces of its display ad business — could be the only lasting way forward.
At the center of the EU’s case is a concept called vertical integration: Google runs the dominant publisher ad server, once known as DoubleClick for Publishers (DFP), and ad exchange, long known as AdX, which means the company can both stage ad auctions and participate in them. That arrangment, the Commission contends, gave it privileged access that stymied competitors and inhibited the natural discovery of fair prices.
Inside DOJ’s proposed breakup
In the U.S., a federal court has already concluded that Google engaged in anticompetitive conduct to preserve its monopoly power in open-web display advertising. Taking that concept further, the DOJ filed a proposed final judgment that would require Google to divest AdX and prevent it from re-entering the ad exchange market for a period of time. Regulators framed the divestiture as the quickest remedy to eliminate the conflict inherent in running a marketplace while owning the house bid.
The plan is even stronger on transparency. That would entail Google releasing all the auction logic that DFP used under an open-source license and having those auctions operated by a neutral third party, with rules transparent to buyers and sellers. The government also retains the right to seek further divestitures if competition does not get better, as well as recommended restraints on self-preferencing as well as data portability and interoperability requirements to prevent the reconstitution of market power.
Significantly, the DOJ wants to claw back a share of profits tied to behaviour until the time of divestitures; the profit would be directed to setting up open-source auctions and to offset publishers’ switching costs. And it is an unusual effort to redesign market plumbing, not just punish past activity.
AdX and DFP explained
Programmatic display advertising is built on split-second auctions that pair advertisers with readily available impressions on the open web. AdX used to win the bulk of those auctions while the DFP, the top publisher ad server, controlled inventory and decided which bids were winners. AdX’s market share was more than 50 percent, according to U.S. court findings; DFP’s publisher ad server share was about nine in 10. The UK Competition and Markets Authority found anti-competitive width and depth concerns, noting that vertical integration between ad server and exchange provided a strong self-reinforcing advantage.
Put simply, if you control the pipes that channel demand and the market where demand is auctioned off, you can quietly tilt the results one way: who sees what bid, when and on what terms. That is why both Brussels and Washington are focused on divorce and transparency — bringing the auction rules into the open and the exchange into independent hands could reshape incentives and allow rivals to compete on price and quality, rather than access.
Industry response and risks
Google says the Commission got it wrong, and it intends to appeal. The company contends that its ad tech products benefit publishers and advertisers and cautions that forced divestitures would add friction and ultimately undermine smaller firms. Previously, Google dangled interoperability pledges that would make it simpler for publishers to mix-and-match using non-Google tech side-by-side with Google Ad Manager without having to divest units.
What publishers and trade groups think, however, is something else. The News/Media Alliance, which represents news organizations, welcomed the tougher remedies, arguing that years of market power in ad tech has funneled revenue away from content producers. Their issues extend beyond auction design to wider platform dynamics – such as the impact of automated summaries produced by AI on referral traffic. Ad buyers, meanwhile, continue to push for visible fees and less friction in the supply chain; themes that sound much the same as those raised by watchdogs and industry studies into transparency and take rates.
There are execution risks. The spin-off of AdX requires a buyer with the scale, neutrality and engineering heft to manage peak auction volume and single-digit-millisecond latency tolerances. It’s great that auction logic is being open-sourced for trust, but we’re still going to need governance, versioning, and security concerns to be solved; the code itself should not be another bottleneck or attack vector. And any transition away from established ad servers is no small thing for publishers with highly complex yield operations built up over years.
What to watch next
In Europe, the near-term question is whether Google offers a proposal that meets the Commission’s demand for structural change. In the United States, all eyes on the court: If the judge signs the D.O.J.’s plan mostly as is, it would herald the most far-reaching reorganization of a digital platform since the modern antitrust era started, more like a utility-like unbundling than a behavioral consent decree.
However the legal chessboard clears, the way forward is plain. Regulators want to disassemble the most sensitive junctures in the ad tech stack, infuse auction dynamics with a touch more transparency and throw the open web a bone in the form of more competitive pricing. For publishers and advertisers reliant on that infrastructure, the next chapter might reset the rules for determining where each programmatic dollar ends up.