A US federal judge declined on Wednesday to force Google to sell its online advertising exchange, sparing the company the harshest penalty sought by the Justice Department and handing Alphabet a decisive remedies win in a case it had already lost on the merits.

Google gets to keep AdX

U.S. District Judge Leonie Brinkema, sitting in Alexandria, Virginia, rejected the government's request that Google give up ownership of AdX, an exchange where publishers run instant auctions to sell ad space. Publishers pay Google a 20% cut on those sales.

That 20% take sits at the center of why the case matters beyond the courtroom: the exchange is one link in a chain of tools — the publisher ad server, the exchange, and the advertiser-side buying tools — that Google operates on both sides of the same real-time auction, a structure publishers have long complained gives Google an informational and pricing advantage no rival can match.

The DOJ had argued that a forced sale was the cleanest way to restore competition. Google countered that divesting the exchange would be technically messy and would leave customers stranded in a long, painful transition. The company also told the court it had previously offered to sell AdX as part of settlement talks with European regulators, and argued that the DOJ's version of the remedy went too far.

Judge Brinkema sealed her order for 14 days to allow both sides to request redactions, meaning the specific behavioral remedies she intends to impose will remain out of public view for roughly two weeks. Those behavioral terms — as opposed to a divestiture — are now the main open question, since they will define what Google must actually change in how AdX operates day to day.

Guilty verdict with a soft landing

The case, brought by the federal government and a coalition of states in 2023, accused Google of unlawfully protecting monopolies in the software publishers use to serve ads and in the exchanges that connect ad buyers with sellers. The states argued that Google trapped publishers into AdX through its ad server.

In April, the court found Google liable for violating U.S. antitrust law in the ad-tech markets. However, it did not find that the company broke any laws with the tools it built for advertisers, even while agreeing that Google illegally locked publishers into its ad exchange. The network unit the DOJ wanted to divest accounted for about 12% of Alphabet's revenue at the time of the suit.

Google's VP of Regulatory Affairs, Lee-Anne Mulholland, said the company was "very pleased the Court rejected the DOJ's proposal to break apart tools that help small businesses reach new customers and grow." Google has separately moved to appeal the underlying liability finding — meaning the legal fight continues even though the structural threat has passed for now.

Three big cases, little structural change

This is the third consecutive time a court has ruled against a U.S. attempt to break up a large technology company. A Washington judge last year rejected the FTC's bid to force Meta to shed Instagram and WhatsApp, ruling the agency failed to prove Meta held a social media monopoly.

In Google's own search case, a separate judge declined to force a sale of the Chrome browser and instead ordered the company to share search data and stop requiring partners to bundle apps. That outcome — conduct restrictions instead of divestiture — is the same remedies philosophy on display in the ad-tech ruling, suggesting US courts view breakup orders as remedies of last resort even after finding liability.

The pattern raises questions about the capacity of the courts to rein in Big Tech's dominance. Google appears to have emerged from this stretch of legal uncertainty largely unchanged and free to focus on building new positions in AI, with the current DOJ showing little appetite to stand in the company's way.

The U.S. approach looks lenient compared with Europe's. EU regulators have hit Google with more than $10 billion in antitrust fines in recent years, including a $3.5 billion ad-tech penalty last September, a $1.7 billion ad-tech fine in 2019, a $4 billion mobile fine upheld in 2022, and a $2.7 billion search fine in 2017.

For publishers and rival ad-tech firms, the immediate milestones to watch are the unsealing of Brinkema's behavioral remedies in about two weeks, Google's appeal of the liability finding, and whether the EU's tougher line on ad tech pushes Google toward divestitures in Europe that US courts declined to order at home.

Reporting sourced from The Wall Street Journal and Axios.