A federal court in the USA ruled.$Alphabet-A (GOOGL.US)$There exists illegal monopoly in some parts of the online advertising technology sector, and this ruling may force this Technology giant to split its $31 billion advertising Business.

On April 17, Eastern Time, according to media reports, US District Judge Leonie Brinkema ruled that Google violated antitrust laws in both the advertising exchange platform and advertising server (the tools used by websites to sell ad space) markets. Last August, Washington D.C. District Judge Amit Mehta ruled that Google's dominant search engine constituted illegal monopoly.

In her written ruling, the judge pointed out that the company also engaged in illegal "tying" practices—linking access to one product to the purchase of another product. Judge Brinkema wrote:

In addition to depriving competitors of the ability to compete, this exclusionary conduct severely harms Google's publisher clients, the competitive process, and ultimately the consumers who rely on open network information.

However, the court did not fully support all the legal requests of the Department of Justice, concluding that in the market for the tools advertisers use to purchase display ads, Google did not meet the definition of a monopoly.

For investors, this means that Google's parent company Alphabet may face business restructuring in the future, while the competitive landscape in the advertising technology sector is set to undergo significant changes. Unlike previous tech monopoly cases, the remedies in this case are relatively clear: to break up Google's advertising business.

Clear remedy: Split Google's advertising business.

Unlike the monopoly case against Google's Search Engine, this advertising technology case has a clearer remedy plan.

Reports and analyses suggest that the most direct solution is to split Google's advertising business: separating the ad server side from the ad Exchange side, cutting them apart and divesting.

This measure will not undermine the company's overall strength. The case only involves a portion of the entire online advertising market, which includes in-app ads and ads displayed on streaming platforms, where Google does not hold a dominant position.

Most of Google's advertising revenue comes from ads displayed alongside its own products (like Search, Gmail, and YouTube). In 2024, revenue from Google's advertising network department (the part involved in this case) is expected to be $30.4 billion, accounting for only 11% of Google's total advertising revenue.

Technology giants are facing a wave of regulatory backlash.

This case is the latest example in a series of antitrust actions initiated by the USA government against technology giants.

Media reports indicate that the Trump administration is continuing the efforts started during former President Biden's and Trump's first term to curb the power of large technology companies.

The Federal Trade Commission is currently reviewing the antitrust case against Facebook's parent company this week.$Meta Platforms (META.US)$CEO Mark Zuckerberg has been testifying in court for several days. The Federal Trade Commission is seeking to break up Meta's Business, forcing the company to separate from Instagram and WhatsApp.

Analysts state that if Meta loses its antitrust lawsuit, "the landscape of digital advertising could change dramatically within 5 years," which could be a positive sign for market competition.

$Apple (AAPL.US)$It is facing an antitrust lawsuit filed by the Department of Justice, accusing it of hindering the integration of external Software with its devices, locking users into its ecosystem.$Amazon (AMZN.US)$The case of the Federal Trade Commission will also be heard in court in September.

Editor/Jeffy