Current Affairs: Passage of the Day - 21 April 2025 | Current Affairs & General Knowledge - CLAT PDF Download

Directions: Read the passage carefully and answer the questions that follow.
When the internet first emerged as the world’s primary form of communication roughly three decades ago, it transformed advertising by offering advertisers unprecedented reach and insights into consumer behaviour.
This rapid rise of digital advertising was fueled by a collection of web-based tools that helped place ads on webpages so that online publishers could monetise their content and advertisers could promote their goods and services. It is from this technology that a garage-based startup known as Google would end up making most of its $1.8 trillion fortune, and be branded an abusive monopolist some twenty years later.
Today, a US federal court has found Google guilty of violating antitrust law over its technology to connect online advertisers and publishers. The 115-page order by US District Judge Leonie Brinkema in Virginia on Thursday, April 17, is a lot to take in.
Why it matters
The landmark ruling against Google’s digital ad network was delivered in an antitrust lawsuit filed by the US Department of Justice (DOJ) in 2023. The DOJ had sought to break up the tech giant’s sprawling ad empire, starting with its Ad Manager product.
It adds to the mounting pressure on Google as its core search business is also in danger of being dismantled. In August last year, the Alphabet-owned company was found guilty by another US federal court of having an illegal monopoly in the search engine market.
However, Thursday’s ruling delivers a deeper blow to Google as it targets the company’s core revenue model. The ruling is also bound to have wide ranging implications for the online advertising industry. While some believe that the ruling could lead to a free and more competitive market, others have argued that the company’s adtech stack integration has been crucial in creating efficiencies.
“The remedies of forced divestiture are blunt instruments that may not achieve the desired ends. Better regulation of the kind that is more highly developed in Europe, that protects consumer rights and increases the responsibility of big tech over its content and influence, would be felt by consumers as having a more meaningful impact,” Damian Rollison, Senior Director, Market Insights, SoCi (a marketing firm), said in a statement.
Meghna Bal, Director, Esya Centre, a Delhi-based tech policy think tank, told indianexpress.com that the antitrust ruling points to an emerging and problematic trend of regulators losing sight of the surpluses created by platforms.
“Our research consistently finds that platforms create value for users on both sides of different digital markets, and losing sight of the synergies between market participants and large platforms may negatively impact a majority of stakeholders. India must look at the wider picture and always heed the potential negative effects that may emanate from leveraging antitrust to disrupt existing market paradigms,” she said.
How online advertising works
Showing internet users display ads relies on three primary ad tech tools: Ad servers, ad marketplaces like exchanges and networks, and ad buying tools.
Ad servers help publishers such as news websites and blogs sell ad spaces to advertisers either directly (by making deals with large advertisers) or indirectly (through ad exchanges) or both.
Google’s leading ad server tool called DoubliClick For Publishers (DFP) finds its roots in the tech giant’s 2008 acquisition of Double Click for $3 billion. In its lawsuit, the DOJ had argued that this acquisition helped Google keep sell-side control out of the hands of rivals such as Microsoft and Yahoo.
The company’s sell-side tools were also improved by its 2011 acquisition of AdMeld, which developed a tool to make it easier for publishers to choose which ad networks and ad marketplaces they wanted to transact with based on supply, demand, and pricing data. Its network yield management functionality was incorporated into Google’s adtech tools.
Ad buying tools essentially let advertisers buy the display ad slots being sold by publishers. Large brands such as Ford and Nike use a specific type of ad buying tool known as demand-side platforms (DSPs) which offer more complex bidding and trading options while requiring high minimum monthly spend commitments. Google’s DSP is referred to as DV360 or DoubleClick Bid Manager (DBM).
Finally, ad marketplaces are where buyers (advertisers) and sellers (publishers) of display ads are matched. There are two types of ad marketplaces: Ad exchanges and ad networks. Ad exchanges run real-time auctions to rank and select the highest bids from advertisers to be sent to a publisher’s ad server. Ad networks, on the other hand, aggregate ad slots from multiple publishers and then sell it to advertisers.
Google’s ad exchange platform is called AdX accessible through Google Ad Manager (GAM). The company’s advertiser-facing ad network is known as Google Ads (formerly AdWords) and its publisher-facing ad network is known as Google Ad Sense.
All of these products in the ad tech stack work together to place advertisers’ ads on publishers’ websites. When a user visits a website, an ad exchange receives a bid request from an ad server which also includes details such as website impressions, user attributes, pricing information, and the time within which the exchange has to respond.
The ad exchange assesses all the buy-side bids from the ad buying tool, determines the highest bids, and shares it with the ad server. The ad server selects the winning bid based on impressions, pricing, target user criteria, and other rules.
This entire bidding process not only occurs in a matter of seconds but also takes place billions of times every day across the Internet.
Google’s monopoly power in the ad server market
The court ruled that Google’s DFP ad server tool had a “predominant share of the market that is protected by high barriers both to entry and expansion.” “This conclusion is reinforced by evidence that Google has acted to degrade DFP’s features without fear that its customers would switch to alternative publisher ad servers,” the order read.
Based on Google’s own estimates, DFP has enjoyed a market share of 84 to 90 per cent in the ad server market over the last ten years. The court noted that Google’s ad server tool was accompanied by high switching costs.
The lack of meaningful alternatives to DFP means that publishers rarely switch ad servers even when Google makes changes to its adtech tool that they do not agree with, such as degrading DFP features by removing publishers’ ability to set a higher price floor on its ad exchange AdX.
“Even Meta shut down its project to build a publisher ad server due to the significant barriers to gaining scale in a market dominated by Google,” the court said.
Google’s monopoly power in the ad exchange market
The court ruled that its market power in the ad exchange market has been fortified by high barriers to entry that stem from Google’s scale and network effects across the display ad ecosystem. As per the order, Google takes a 20 per cent commission on transactions carried out through its ad exchange.
“Google has never reduced its overall 20 per cent take rate and has continued to deny discount requests, yet AdX’s customers have not left and AdX has not lost market share,” the order read.
In response to Google’s argument that it set these prices before it had monopoly power, the court said: “The steadiness with which Google has charged a 20 per cent fee in a rapidly maturing market involving transactions with minimal variable costs, the repeated recognition by Google employees that the services AdX provided were no longer worth 20 per cent of publisher revenue, and the strong evidence that customers were unable to switch from AdX even when other ad exchanges lowered their prices all support the finding that AdX charged supracompetitive prices.”
Google’s abuse of monopoly power in these markets
The court ruled in favour of the DOJ on allegations that Google’s tie-up of its ad server tool (DFP) and its ad exchange (AdX) was unlawful since it prohibited publishers from receiving real-time advertiser bids through AdX unless they also used DFP.
It also said that Google had “artificially handicapped its buyside (AdWords) to boost the attractiveness of its sellside (AdX).” This means that it limited the reach of advertisers using AdWords to only those publishers using Google’s AdX and DFP tools.
“By forcing Google’s publisher customers to use a product they would not necessarily have otherwise used, by making it difficult for rival publisher ad servers to compete on the merits, and by significantly reducing rivals’ market share, the tying of DFP to AdX has had a substantial anticompetitive effect in the publisher ad server market for open-web display advertising,” the order read.
“Google further entrenched its monopoly power by imposing anticompetitive policies on its customers and eliminating desirable product features,” it added.
However, the court did not find that Google’s acquisitions of DoubleClick and AdMeld were anti-competitive.
“Although these acquisitions helped Google gain monopoly power in two adjacent ad tech markets, they are insufficient, when viewed in isolation, to prove that Google acquired or maintained this monopoly power through exclusionary practices,” the order read.
The court also rejected DOJ’s allegations that Google has been mistreating advertisers.
What next
In response to the ruling, Google said, “We disagree with the Court’s decision regarding our publisher tools. Publishers have many options and they choose Google because our ad tech tools are simple, affordable and effective.”
Meanwhile, US Attorney General Pamela Bondi said, “This is a landmark victory in the ongoing fight to stop Google from monopolizing the digital public square.” In a post on X, former FTC chair Lina Khan said, “Google’s monopolistic tactics squeezed creators & publishers, depriving Americans of a more free and open internet. This ruling is a key win for the public—and for ensuring that antitrust law keeps pace with 21st-century monopolies.”
Now that Google has been found guilty of illegally monopolising online advertising markets, the next step is the penalty phase where the company and the DOJ will debate remedies before the court.
While the DOJ will likely try to convince the court to direct Google to sell off its advertising technology in order to stop its monopolistic behaviour, the tech giant might fight off such an attempt by arguing that its acquisitions of adtech companies were not found to be anti-competitive.
[Excerpt from Indian Express "Google Antitrust Ruling" Dated 21/04/25]
Q1: Which U.S. District Judge ruled that Google had illegally monopolised parts of online advertising technology?
(a) Leonie Brinkema
(b) Sonia Sotomayor
(c) Merrick Garland
(d) John Roberts

View Answer  

Ans: (a)
Sol: U.S. District Judge Leonie Brinkema ruled that Google had illegally monopolised aspects of online advertising technology.

Q2: Which three key markets did the Justice Department accuse Google of monopolising?
(a) Social media, search engines, and mobile apps
(b) Ad servers, ad exchanges, and tools for advertisers
(c) Cloud services, hardware sales, and operating systems
(d) Video platforms, e-commerce, and data centres

View Answer  

Ans: (b)
Sol: The Justice Department accused Google of monopolising ad servers, ad exchanges, and tools for advertisers.

Q3: What possible remedy is the Justice Department seeking following the ruling?
(a) Awarding Google new contracts
(b) Reducing Google’s ad rates
(c) Divesting certain ad technology assets
(d) Merging Google with another tech company

View Answer  

Ans: (c)
Sol: The Justice Department is seeking remedies that could include divesting certain assets, particularly in the ad technology space.

Q4: Which part of Google’s ad business did Judge Brinkema not classify as a monopoly?
(a) Ad exchanges
(b) Publisher ad servers
(c) Advertising tools market
(d) Search engine advertising

View Answer  

Ans: (c)
Sol: The judge did not classify Google as a monopoly in the advertising tools market.

Q5: What broader trend does this case reflect within the tech industry?
(a) Decreasing use of digital advertising
(b) Regulatory actions against monopolistic behaviours
(c) Expansion of tech companies into farming
(d) Legal support for tech companies’ monopolies

View Answer  

Ans: (b)
Sol: The ruling reflects a broader trend of regulatory actions aimed at curbing monopolistic behaviours in the tech sector.

​