A historic lawsuit brought by the U.S. Justice Department against Alphabet’s (GOOGL.O) Google over its monopoly on advertising technology may benefit competitors and websites that sell advertising space, but it leaves the future of the actual advertisers in doubt, according to experts interviewed by Reuters.
In a complaint filed against Google on Tuesday, the Justice Department demanded that the corporation sell Google Ad Manager, a collection of tools that includes one that enables websites to list their ad space for sale and another that acts as a marketplace for matching advertisers and publishers.
According to Neil Begley of Moody’s Investors Service, if the Justice Department’s action is successful, “advertisers and publishers could have greater leverage with more options with expanding players – and subsequently more competition.”
According to Brian Mandelbaum, CEO of ad tech company Attain, Apple Inc. (AAPL.O), which is rapidly expanding its fledgling advertising business and marketing it as privacy-focused, could benefit if Google advertisements become less effective.
Ad industry insiders claim that Google’s practice of running advertisements on websites it does not own provides Google with useful data regarding the performance of an advertisement.
Apple has “an ability to be a new dominant force” in advertising, according to him, because it has data from owning phones, using the Safari web browser, and distributing programmed via the App Store.
According to Paul Bannister, chief strategy officer at Café Media, which assists small and medium-sized publishers in selling ad space, Google’s rivals in the ad tech space are increasingly developing products that cater to both publishers like news websites, which sell ad space, and advertisers, who currently buy ads, like Google does.
According to Bannister, companies like X and, which is owned by Microsoft (MSFT.O), who will continue to cooperate with both sides of the ad-buying ecosystem, would gain from Google being obliged to divest the tools that support publishers.
Publishers will have greater control over the prices they may charge for ad space and may end up paying less in fees if there are options outside Google, according to Mandelbaum.
According to Paul Gallant, managing director at Cowen Washington Research Group, if the case is successful, it might “mark the start of substantial business model adjustments for Google.”
According to him, Google may lose important data that aids in targeting advertising to the right customers as a result of the relinquished properties.
According to Nikhil Lai, senior analyst at research firm Forrester, Google ads for advertisers may become less effective if the company loses access to data signals.
The government has already brought legal action against powerful corporations at least twice, with significant outcomes. An agreement to dissolve AT&T was reached in 1982 as a result of a lawsuit against the firm that was initiated in 1974. Numerous advancements in telecommunications have been attributed to that split.
The 1998 lawsuit brought by the Justice Department against Microsoft restrained the business at a time when it was attempting to expand the use of its dominating operating system to the web browser. Even though the legal dispute was resolved, it is believed that it helped pave the way for Google and other internet pioneers.
