USA v. Google LLC - Part 33 - VI. RELEVANT MARKETS - B. Product Markets - 1. Publisher Ad Servers

VI. RELEVANT MARKETS

B. Product Markets

1. Publisher Ad Servers

282. Publisher ad servers for open web display advertising is a relevant antitrust product market. For simplicity, this Complaint refers to these products as “publisher ad servers” or “ad servers.” Google offers DoubleClick for Publishers, now part of the Google Ad Manager suite, as a product in this relevant market.

283. A publisher uses a publisher ad server to manage the sale of display ads on its webpages. Publisher ad servers provide functionality such as ad delivery, reporting, and forecasting of availability across direct deals and indirect advertising sales. Publisher ad servers evaluate potential sources of advertising demand and are the final arbiters of which ad is selected to fill designated inventory slots on a publisher’s webpage.

284. Other ad tech products are not reasonable substitutes for publisher ad servers. As compared to publisher ad servers, alternative products—such as publisher ad networks (including Google’s AdSense product), ad exchanges, closed web platforms, or mobile app ad mediation platforms—offer different functionality, serve distinct needs for publishers, use different pricing structures, and/or monetize different types of digital ad inventory. Thus, there are no reasonable substitutes for publisher ad servers, and a publisher ad server monopolist would be able to maintain prices above the level that would prevail in a competitive market and/or maintain quality below the level that would prevail in a competitive market.

285. Google has maintained a monopoly in publisher ad servers in the United States since at least 2015. As confirmed by Google’s internal assessments, Google’s share of the publisher ad server market in the United States, measured by either revenue or impressions, has remained above 90% for many years. Its worldwide market share is similar.

286. Importantly, Google’s dominance of open web inventory sold via open auction also gives Google a dominant position with respect to the sale of other types of valuable inventory transacted through its publisher ad server. These include directly sold advertisements and advertisements sold outside of open auctions via programmatic advertising tools, e.g., programmatic guaranteed and programmatic direct. Although these transactions are not substitutes for open auction transactions, they give Google substantial sources of additional revenue and data concerning some of the most sought-after publisher inventory. For example, in 2021, direct advertisement sales through DFP represented over $11 billion in gross revenues to publishers, with programmatic guaranteed and programmatic direct representing approximately $1 billion in gross revenue.

287. Google has exploited its monopoly power over DFP. In 2015, Google developed technology within the publisher ad server that was able to support large volumes of programmatic direct transactions. Google initially planned to enable third parties to implement the technology via API protocols. By early 2016, Google recognized that some third-party exchanges were ahead of AdX in developing programmatic direct technologies. To forestall the development of these competing products, Google developed guidelines which prohibited DV360 from engaging in any engineering work to support competing products before a similar integration was already developed between DV360 and AdX. As a result, competitive product development and innovation was impeded until Google’s programmatic direct technologies became the de facto market standard.

288. Google’s durable monopoly power in publisher ad servers is protected by significant barriers to entry. The cost to build a publisher ad server and achieve the scale necessary to compete effectively are significant. Publishers typically can only use one publisher ad server at a time and rarely incur the costs to switch from one to another due to engineering integration costs and significant disruptions caused by switching. The cost to build a publisher ad server is significant, and barriers to entry are reinforced by Google’s anticompetitive conduct in the market.

289. Google’s monopoly power in publisher ad servers is further evidenced by Google’s ability to engage in conduct that benefits itself at the expense of publishers without inducing them to switch to an alternative publisher ad server. Moreover, Google’s monopoly power in publisher ad servers is protected by Google’s anticompetitive conduct described herein.