Brian Kardell: Okay. Hi, I am Brian Kardell. I'm a developer advocate at Igalia.
Eric Meyer: I'm Eric Meyer, also a developer advocate at Igalia, and with a new microphone, so hopefully my audio will be better this week.
Brian Kardell: It sounds better to me.
Eric Meyer: Good.
Brian Kardell: We're going to talk about the title of the show that I came up with without discussing with Eric, Apocalypse Now.
Eric Meyer: Yeah. I don't know if it's now yet.
Brian Kardell: It's not now.
Eric Meyer: It's looming closer. This is about the other Google antitrust court case, which they lost. They lost the one about default search deals, and now they've lost at least half of the one about advertising and basically about web advertising.
Brian Kardell: Sort of like two-thirds, right?
Eric Meyer: Like half to two-thirds. Yeah, sure, two-thirds. That's fair.
Brian Kardell: It's a 115-page ruling.
Eric Meyer: Yeah, 115-page ruling.
Brian Kardell: A case that was brought in January 24th, 2023 when the U.S. and eight states ... California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia ... filed multiple counts of antitrust complaints about various aspects of Google's advertising mechanisms. I guess, do you want to maybe break it down a little bit, what they're about?
Eric Meyer: Yeah, sure. Basically, the plaintiffs, the eight states and the Department of Justice, said ...
Brian Kardell: Hey, by the way, before we start, I learned a lot about advertising in this, reading this 115-page document. I don't know if you did, but maybe our listeners will also learn some things about advertising that they didn't know. I was actually enlightened to know how some of this actually worked, so anyway.
Eric Meyer: Yeah. Actually, I agree with that. Yeah, the plaintiffs, which is the eight states and the Department of Justice, said basically Google has created a monopoly in online advertising, and they alleged various things. Google denied those various allegations. They had a long court case, they made their arguments, and the court essentially found that Google has created a monopoly in the selling of ad space and a monopoly in the side where you buy ad space, but have not created a monopoly in the overall ad world. Which I was scratching my head, but then as I read into this, I said, 'Okay, well, I get where they're coming from.'
Brian Kardell: Yeah. It's fascinating to me. If you wanted to buy ad space in, say, Wolvic, for example, you could come and talk to us, or if we wanted to go the other way and look for advertisers, do we go to individual companies like Palmolive dish soap? Do they have an ad person who's working with every print company, every website? I guess that's how it was at one point, but then at some point we created other ways to do that, like exchanges, where we can say, 'Hey, here's a bunch of ads, and now we have buyers of ads and sellers of ads, and we need to partner that.' There are these real-time auctions where it's like, 'Hey, we're loading this page,' and in the process of loading this page, wow, a bunch of really complex things have to happen, where the seller of the space ... publishers, I guess, this is the sell side ... has to be somehow connected to the buy side, which is where people say, 'Here's what I would theoretically pay for such a thing.' Then in real time, somebody wins an auction and you see ads. It's complicated.
Eric Meyer: Yeah, it is. I mean, there's a long history. We've talked in the past about default search deals, but the whole reason that default search deals were made is to try to get more people using Google and therefore more people seeing the ads on Google. That goes back 20, 25 years at least. There were various entities that arose to try to either service the publisher side or the seller side. Google bought at least some of them. That was not, however, found to be monopolistic. Google bought DoubleClick for 3.1 billion, and they bought somebody else who I just blanked on, but they bought a couple of competitors in that space. That was not held to be monopolistic, or at least the court did not find it to be monopolistic. Certainly the plaintiffs argued that it was.
Brian Kardell: Those things have to be approved before they can happen, right?
Eric Meyer: Yeah, in a lot of cases.
Brian Kardell: They have to be approved before they can happen. In a related note, there are also a bunch of suits happening against Meta right now.
Eric Meyer: Yes.
Brian Kardell: While that's not the subject of this particular episode, it is interesting, because over there they have this like, 'Well, these things were approved, but now we might end up calling them monopolistic because of other things that come to light.' That's interesting to me, that that can even happen, but it can.
Eric Meyer: Yeah. From my understanding from reading this ruling ... and I'm not going to just come right out and say everyone should read this ruling, right? It's 115 pages of a court ruling, but I will say that a significant portion of that 115 pages is inline citations. Once you learn to treat them the same way as your banner ads on the web, you skip over them, it reads faster. It's still maybe 70 pages of actual content you're consuming. I would actually love to see somebody who published rulings where all of those inline citations were pulled out into pop-ups or something, but anyway. The thing that I learned was that being a monopoly isn't just dominating a market, it's acting to preserve that domination, doing things that shut other competitors out. For example, buying DoubleClick, just to pick one example, is not held to be monopolistic because, you know, businesses acquire each other, and it makes business sense to acquire a competitor who has better technology or different technology that complements the technology you have. Then, after having done that, if you do things to cut everybody else out of the market that you are trying to service, then that can become monopolistic down the line. That's actually, I think, where some of this ruling comes down on, is saying, 'It's okay that Google did these things, but then later it took these moves that were specifically designed, or at least appear to have been specifically designed, to make it impossible to compete with them, and that's monopolistic behavior.'
Brian Kardell: Yeah. There's a line drawn here between, 'Okay, we want to make our business better, we want to make it better for our shareholders, we want to make it better for clients, we want to make it better for the buyers, for the publishers, for people doing search.' If all of the things are in pursuit of that and you build a better mousetrap, then you can even win the market. Even not all monopolies are necessarily illegal. They have to rule that it is actually illegal, and there have been in the past, like for a really long time. Before the breakup of AT&T, it was a granted monopoly. We said, 'Well, you can be our single monopoly.' There's all kinds of reason that we thought that was really efficient, and it was fine until it became anti-competitive, right? It was like you're shutting out all possible competition in the market. I think it's fair that it's in front of a judge, because it is a judgment that I think lots of reasonable people could have intelligent arguments, and have. There are intelligent arguments on both sides.
Eric Meyer: Yeah. I mean, Google's argument was essentially, from what I understand, 'We built a better mousetrap and people love it. That's what business should do.' The plaintiffs argue differently, and the judge mostly found in favor of the plaintiffs. There were some things that I took away from this. For example, in the ruling, the judge writes that generally speaking, if you're above a 70% market share, that's the threshold above which you start getting scrutinized as a monopoly, or there's the presumption that you have achieved monopoly status if you're above 70%. It can be lower, it can be higher, it depends. Then they cited an earlier case ... I think it was Grinnell, but I could be misremembering ... where they said an 87% share of a market, quote, leaves no doubt, unquote, of monopolist status. Google, in the publisher side of the ad server market, is at least 91%, so they had a really difficult argument to make at least on that side, to try to say, 'We're not a monopoly.' Then there were also other things that were introduced in the arguments that, me reading it ... I'm not a lawyer, certainly I'm not a monopoly lawyer or a trade lawyer or whatever the appropriate subfield of law is, and I'm not a judge ... but they had these programs that did things that sure sound monopolistic to me, like First Look and Last Look.
Brian Kardell: Well, let's talk about those.
Eric Meyer: Right, and Project Poirot. First Look was basically, as an ad bid proceeds, Google set it up so that they got a look at it first, so that they could then compare it to other rates and pick the best rate for getting that sale. Then Last Look was basically the same, except it happened at the end. After everyone else had put in their bids, Last Look was, 'Maybe we could underbid a little or overbid a little or whatever.'
Brian Kardell: We could win the bid because we know what the winning bid is, right?
Eric Meyer: Right. That seems pretty exclusionary, to me, of other competitors. Then this Project Poirot, if I understood it correctly, was their way of actually shading prices. They would take a price that was coming in and alter it a little bit to make other people's, other competitors' bids, be at a disadvantage. It's things like that that I think would make it really hard. I think they would've had a hard time getting a judge to agree that they were not monopolistic. Basically, what the court said is the publisher ad servers ... so that would be DoubleClick for publishers or Google Ad Manager. That's the publisher side. I have space to sell ads. I am CNN, and I've got places in my page layout where I have set aside space for ads to go.
Brian Kardell: I think 830,000 of them on CNN.
Eric Meyer: Sure. If I'm working with Google ... and I don't actually even know if CNN works with Google, but we'll take it as a hypothetical ... I have this space, and here are the minimum rights I want to make for it. You can set that. On that side of things, basically you're managing a inventory for large web publishers. That's what the Google Ad Manager and DoubleClick for Publishers side of this is. They're priced differently than other ad technology tools, and they're recognized as a distinct product by the ad industry, so that constitutes a market. Just the publisher side is it's own market.
Brian Kardell: Yeah, because there's also it's not just, 'I have all these slots.' It's like here's how big they are. Maybe here's where they are on the page. Maybe something on the initial landing page is more valuable than something four screens down.
Eric Meyer: If you're Sinclair Media, you're probably selling those ads spaces on all of your local news stations that you own. That's one market, and that's the one that Google had 91% of that market, and so the court said, 'Yeah, this is a monopoly situation.' Then if you're somebody who wants to place ads, if Igalia wanted to place ads through one of these services ...
Brian Kardell: We may. Say more.
Eric Meyer: ... then we would go onto one of these ad exchanges, so AdWords is an ad exchange that Google runs. They're part of most programmatic open-web display transactions, as the court put it, and they're recognized as a distinct product by people in the industry, and they're priced differently than other ad technology tools. Here, when it came to the ad exchange, Google doesn't have quite the market share. It was a lot fuzzier, but it was cited as somewhere between 54 and 65% of the market, which you might notice, hmm, that falls under that 70% threshold they mentioned earlier, but they did mention that sometimes you can be below that threshold and still be considered a monopolist. What the court found here was that the take rate, which is to say Google's cut of the payments for these ads, were twice the industry standards, basically. They were taking 20%, whereas the industry standard outside of them was around 10%, and that persisted for a long time, and they were pressured repeatedly to lower it and they refused, and they don't give bulk discounts. It's just 20%. That in itself was taken as evidence of a monopoly, because it's like this durable higher charge, this higher rate, that Google repeatedly refused to change it. It wasn't that nobody ever asked them. It was that Google kept being asked and was like, 'No. You can pay 20% or not use AdWords. Your choice.'
Brian Kardell: You can set the price. It's too valuable a thing to not pay that price.
Eric Meyer: Right, yeah. I mean, I would assume that that's because Google AdWords is presumed to have an advantage with the publisher side, the DoubleClick for Publishers and the Google Ad Manager. This was taken by the court as evidence of monopoly.
Brian Kardell: I think it's the only way that you get into Google search ads, I think.
Eric Meyer: Potentially. I'm not 100% sure about that part.
Brian Kardell: Yeah, I think that was part of the thing.
Eric Meyer: Yeah, because I just want to say, we read the ruling. We did not read all of the testimony, which would be thousands upon thousands of pages.
Brian Kardell: Sure. Let's also throw in another bit of distinction and complication, which is something I kind of wondered about. What are we talking about here? Because again, there are ad agencies, and they can do different things for you. There are different companies that do different kinds of services, different ways to promote your company, different ways to advertise. What are we talking about here? When you open a web browser on some, the new page has a full-page ad. Are those part of it? What about if you have any native apps on your phone, a lot of them have an ad break. If you have a native game that you download, a lot of them are just ad-supported, and you're just like, 'Oh, hey, you're going to watch an ad in this native game.' Then you can take this on and on and on and on, and the question is are those all part of it? Do those all help set the market, or are we drawing a distinction about what this market is?
Eric Meyer: Yeah, so that part was interesting to me. This is the part that Google, quote, won, unquote, on. I'm going to read a quote straight from the ruling. This is page 54 on the ruling, if anyone wants to look it up. 'The Court finds that plaintiffs,' that's the states and the Department of Justice, 'have failed to show that advertiser ad networks for open-web display advertising constitute a relevant product market.' This is the thing, it turns out, about antitrust cases. I'm going to actually quote Mike Masnick. People may know of him from Techdirt.com. He also has a podcast that he does called Ctrl-Alt-Speech, and on the most recent episode as of this recording, which was the 17th of April, 2025 episode, he and his cohost were talking about the Meta antitrust case, which we're not really going to get into here. In commenting on that, Mike said, and I quote, 'The thing with any antitrust case is the definition of the market is everything,' unquote.
Brian Kardell: Yeah, it makes sense, a lot.
Eric Meyer: Yeah. That gets to the question that you're asking. In-app ads, is that part of this market? The plaintiffs, from what I can tell, were arguing that the open-web ad market is the entirety of advertising, and the court basically said, 'Well, this doesn't convince, because based on testimony, advertisers are perfectly willing to go to where the eyeballs are.' If they have ads on the open web and then they have ads on in-app ads, which Google does not really handle, or sponsorships that are like ad reads in the middle of podcasts or videos on YouTube, those are ad markets, and the thing that Google has built that is in this case doesn't really touch on those, and that's the market that we should be concerned about. Google has not established a monopoly there, because Google does not monopolize in-app ads and video ads and sponsorship reads and blah, blah, blah, blah, blah, blah, blah. They have been dominant in this open-web market, which is the phrase that gets used a lot in this ruling, open-hyphen-web. Open-web display advertising is actually the term that gets used a lot, and that's where Google was found to have dominated both the publisher side and the buyer side, like the supply side and the demand side, from what I can tell.
Brian Kardell: Okay. We'll be right back after this brief ad break.
Eric Meyer: Nice. It was interesting to me, I gotta say. What was interesting to me was that there were a lot of references in this ruling back to the Microsoft antitrust case at the turn of the millennium, which a lot of people have argued, and I would tend to agree, the ruling in that case set the stage for Google now being in at least two antitrust cases, and now having lost or at least partially lost them both at this stage. Google can still appeal and have said that they will appeal, and even if they hadn't said that, everyone would assume that they would appeal. You can argue that Microsoft being told to stop doing the things that it was doing, and settling with the Department of Justice to not be broken up into pieces, really set us up for this a quarter century later. That's how that goes sometimes.
Brian Kardell: Yeah. I mean, as far as most closely directly relevant thing in the web space, it definitely is the thing that immediately springs to mind. I'll mention that the other Google antitrust thing about search is also referenced in this one, and it has to do with, basically, that's why Google is initially involved in ads in the first place, is so that you can fulfill the ads on search. That's a particular kind. That's this text-based advertising. Then also the market is like, 'Does it include video ads? What if it's an animated GIF?' There's all these tricky questions to answer, but I mean, I thought this was really, really interesting, the amount of complexity that goes into this. I would have not imagined that it was this real-time, to be totally honest with you.
Eric Meyer: Oh, the actual way that ads are served up?
Brian Kardell: Yeah, yeah.
Eric Meyer: Yeah, I agree. That was interesting, to find out that literally as a page is being assembled, calls are going out across the various networks and bids like auctions are happening and bids are happening automatically in literally milliseconds, and then whoever wins, whether fairly or not, those ads get sent back to the requesting page to be inserted into the various slots and show up 480,000 times, like you said. Yeah, just the whole thing about, 'Oh, this is real-time.'
Brian Kardell: That feels so complicated. I did think, reading this, 'Gee, it feels like there should be room for much simpler solutions,' I don't know, and I know it's super naive, because I gave all of an afternoon's worth of thought to it, but it seems really complicated for what it does.
Eric Meyer: Yes. I mean, granted, but also, I know people who used to run essentially static ad networks. I mean, they weren't fully static. Well, maybe one of the ones, but compared to what Google's doing, pretty damn close.
Brian Kardell: Right.
Eric Meyer: None of those ad networks exist anymore, because they couldn't get people to basically pay for ads on their networks. Now, the interesting question is, is that because Google offered these products that were essentially competition-destroying, and may be. I can't say, in any specific individual case, did this ad network basically curl up and die because Google was cutting them out of a fair competitive landscape, or did they just not have what was needed to make a go of this. No way to know, but I think overall, the court basically said Google has done many things, often with understanding of what they were doing and the effects that it would have on their marketplaces, on these two marketplaces, that were intended to lock as many people in as possible. There was a line. I don't remember exactly where it was in the ruling. It would've been on the publisher side, so on the DoubleClick and Google Ad Manager side, basically saying that for a publisher, like a large publisher, to switch from one ad exchange to another was an almost year-long process and incredibly technically difficult, which I do not know that I understand that. It seems like it shouldn't be that hard, but I have never been in charge of advertising at a large publisher so I don't know how that works, and what kinds of hooks you have to wire up to the stuff that you're publishing. That was specifically called out, so clearly the court found it relevant. The reason we're talking about this is that if Google were forced, let's say, to spin off its ad components, and thus greatly reduce the amount of ad revenue they were making, that would have a direct impact on their funding of things like Chrome, assuming that the other court doesn't force them to spin that off. We've already talked about that.
Brian Kardell: That's really fascinating to me.
Eric Meyer: Sure.
Brian Kardell: I've been trying to write about this for a really long time, that it's so interconnected. I want to be really clear that ... at least, I mean, I'm not speaking for you, I'm just saying for me ... I'm not personally making a judgment. I'm scared of how do you extricate the parts of the problem, because we don't need to get into all the what they did that was good and what was bad. I mean, we can, because it's interesting, but if you just take as read there will be a judgment, and somehow now the courts are going to do some things ... there are a whole host of different remedies on the table ... how do you do that in a way that doesn't harm what is the funding model for the web? It's tricky. I actually wish that this case were first, to be totally honest with you, because personally, I think ... you can look at this from multiple directions ... but I think this is the directionality of the problem, is that all of Google's money ... not all of it, something like 87% or 90% something like that ... comes from advertising.
Eric Meyer: Yeah, certainly the money that got them to where they are.
Brian Kardell: Exactly.
Eric Meyer: A huge component of the money that keeps them as they are.
Brian Kardell: I think that you could argue that all the other spin-off things are ultimately in pursuit of driving the sweet, sweet, delicious advertising dollars. Hey, they also make Android, which is a whole nother antitrust thing that they've got going on, but why make Android? Why make Chrome? I mean, it's because you can drive the ad on the platform, and if you get Android, maybe you can also get Play Store and maybe you can get ads revenue from the Play Store. I think that all of those things tie together. If somewhere you have to. I don't know if you saw this thing. It was an article that was on Ars Technica. I just love the title and the graphic that went with it. It was the Operation game. You know the game, Operation?
Eric Meyer: Yep.
Brian Kardell: Somebody had mocked it up, where on the board itself it says Operation normally, it said Monoperation, where you get to play the DOJ, and it had on the body all these different pieces of big tech. I think they were all Google, if I recall, but which one do you get, and you have to be really careful. I just really like that analogy, because it's like I really hope that it is really careful and thoughtful and surgical and not careless.
Eric Meyer: Well, I think what we're afraid of is rulings that are very narrowly scoped to the thing that was alleged, that ignore all the downstream effects.
Brian Kardell: Yeah. I think you gotta think about the whole ecosystem. Also it has to be very careful, because they're not all the same suit and they don't all involve the same company. The default search one, if they prevent default search deals with Mozilla, well, see you later Mozilla, right?
Eric Meyer: Right.
Brian Kardell: Yeah, there's all kinds of complex interrelationships here.
Eric Meyer: I tend to agree with you, actually. I have a lot of sympathy for what you said, that we wish this ruling had come first, and then maybe even the remedies from this ruling could have come first.
Brian Kardell: Yes, yes.
Eric Meyer: Then we can start to think about things like, okay, does Chrome need to be spun off. Where is Chrome now, if we've already had remedies in this particular case? Maybe Chrome went with the sell side, or maybe in this case they were like, 'Chrome doesn't fit in with either of these, and it stays with the parent company,' and these other two things were split off. I don't know. They made Android, they made AdWords, they made the Ad Exchange, they made Chrome, they made default search deals, to get eyeballs, more eyeballs. To get attention, not in the, 'Please pay attention to me,' way, but the, 'Please see our ads,' way, so that we can make money on them, which huge market there, but was it a market that allowed for others to come in, and according to the ruling, no, at least recently. As I was reading this, even when I went through parts like the parts on First Look, which is pages 29 to 31 ... Last Look is pages 34 to 35 ... there was other stuff in there too. The unified pricing model, which the court held was not actually that helpful or that unified, but you were saying Google was arguably doing all this stuff to build the best mousetrap on the market. There's a part of me that was asking myself in the back of my head as I'm reading through this ruling, 'Does the nature of software engineering tend towards monopoly?' Efficiency and stability and being able to predict, within given parameters, certain things, those are all things that we tend to prioritize and prize in software development. Under the Sherman Antitrust Act and various other legal and philosophical frameworks, it's not at all prized in markets. That feels like maybe there's a tension there that goes a little unrecognized, not necessarily by the courts but I think just by all of us. It's like HTML could be argued to have a language monopoly.
Brian Kardell: It doesn't generate money. It isn't a market exactly.
Eric Meyer: Yeah. I don't know. I haven't thought this one all the way through, but this was just the feeling that I got reading the ruling over the last couple of days. I was like, 'Well, but that's what engineering companies do.' Again, stuff like First Look and Last Look, that is a case of building the software and these algorithms to actually have at least what felt to me as exclusionary behavior. There's nothing in that that really argued for making things more efficient on a global scale.
Brian Kardell: I didn't know about the history of that or anything like that. I have to say that reading that, part of me wondered, 'Do I have a bias here, that all I know about this is this paragraph and a half that has been presented?' Because when you read it in this fashion, it just seems so like, how does somebody think you would get away with that? I mean, it seems like obvious self-dealing, but then to your point, yeah, but then people buy for the fact that you do that, which is an advantage to your product. You know what I mean? I do in a way get how, if you squint at it just right, maybe you can say, 'No, but that's why you buy our product, because you have the advantage of last opportunity to bid.'
Eric Meyer: Yeah, maybe.
Brian Kardell: Maybe that did seem totally fine, but yeah, I don't know. It's phenomenally interesting, and I think, to just flash back to the quotes that you talked about earlier when you were saying there's 70%, 87%, hard to argue it's not a monopoly when it's 87%. I just think back to the Supreme Court, like, 'I'll know it when I see it.' It's very hard to point at, and I feel like that 87% is like that's a number that we can just use and say, 'Okay, look, I think we can all agree, 87%,' but why? It's completely arbitrary. It just happened to be the one that they pointed at. I'm really glad that I'm not a judge and that I'm not a lawyer, and also that I'm not Google right now, because I imagine, not crying tears for Google, but there are people who really did put their lives into that and now it's in court, and that can't be fun. I don't envy them.
Eric Meyer: No. I would entirely agree. Well, I think we'll probably be back to this at some point. The first case, the one about default search deals, I believe arguments are being made right now as we're recording for what the remedy should be, and that's expected to go through May 9th or something, early May. We haven't gotten to that point in this case about the ad exchanges and the ad servers yet. That will be coming. Like I say, Google can't appeal at this moment because the court hasn't said, 'Here's what we think should be done.' In neither case has the court said, 'This is how Google should be broken up,' or here's how many billions of dollars Google needs to pay in a fine or whatever it is. Once that happens, then Google is allowed to appeal. We're not up to that point yet. I expect we'll come back to that at some point in the future.
Brian Kardell: Yeah. I think we won't actually know the results of that until August, and I'm sure that we'll be talking about the appeals and the appeals of the appeals and stuff for a long time. If history is any indication, it's far from over, but okay. That's all the time we have. We have a hard stop here.
Eric Meyer: Righty-o.
Brian Kardell: Thanks.
Eric Meyer: Yeah, thank you sir. Talk to you soon.
Brian Kardell
Eric Meyer