Ad Tech Briefing: Has Google sacrificed Privacy Sandbox on the altar of antitrust concerns?

• Google was ruled a monopolist on the majority of its ad tech offerings
• The commencement of the remedy phase of its antitrust search trial 
• Google Chrome’s U-turn on third-party cookies 

Last week, a U.S. federal court in Virginia found Google guilty of violating antitrust laws in two key digital advertising markets. Judge Leonie Brinkema ruled that Google had unlawfully monopolized both the publisher ad server and ad exchange markets and had illegally tied its ad server (DoubleClick for Publishers, or DFP) to its ad exchange (AdX).

However, the court did not find Google guilty in the third alleged market — advertiser ad networks. Plus, it’s worth noting that Google has voiced its intention to challenge the rulings.

The case, brought by the U.S. Department of Justice, now enters the remedies phase, where the focus shifts to determining how to restore competition. DOJ lawyers are expected to push for structural remedies, including the potential breakup of Google’s ad tech stack. A forced divestiture of DFP or AdX — two linchpins of Google’s dominance in programmatic advertising — is now firmly on the table.

The outcome of the remedies phase could reshape the digital advertising landscape, with significant implications for publishers, advertisers, and rival ad tech platforms. 

Google’s priorities?

Judge Brinkema’s ruling came just days before the DOJ’s parallel battle with Google over its search market dominance — a case where Google also contends an earlier guilty verdict — formally entered its remedy phase on April 21 in a Washington, D.C. courtroom.

Here, the DOJ proposes significant measures, including forcing Google to divest its Chrome browser, cease default search engine agreements, and share search data with competitors. Google argues these remedies are excessive and plans to appeal, with the battle in this arena set to play out further in the weeks ahead. 

A quick perusal of this week’s Q1 results from Google parent Alphabet shows which of these two battles with the DOJ will take priority. Search revenues ($50.7 billion for the period) grew almost 10% year-on-year, while Google Network revenues, i.e., its display ad business, decreased 2% year-on-year to $7.3 billion.

Privacy Sandbox U-turn

Meanwhile, Digiday readers will need no reminder that earlier this week also saw the Google Chrome team roll back efforts to deprecate third-party cookies — a move that caused many ructions across the sector. For some, this spells the death of Privacy Sandbox, an effort to continue accurate web advertising within Chrome that has taken place for more than half a decade. 

Officially, Google claims all of these developments happened in isolation, and that its Privacy Sandbox efforts are still alive, with meetings at next week’s tentpole industry conference Possible on course. 

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However, several sources told Digiday that since the April 22 announcement, Google has been playing the long game, or 3D Chess, while the rest are playing checkers. 

Anthony Chavez, vp Privacy Sandbox at Google, “there are divergent perspectives” on the future of display advertising without third-party cookies. Hence, Google won’t roll out a prompt for such technologies within Chrome.

In theory, this development could have interfered with publishers’ attempts to gain first-party consent from their audiences, which is necessary to continue a sustainable ad-funded business model without third-party cookies. A look that could scream “ANTI-COMPETITIVE” to some market observers, even if a defendant pleads user-privacy as mitigation.

Of course, Google publicly stands by its utilitarian rationale, i.e., promoting ad-funded publishing, for its U-turn on permitting third-party cookies in Chrome, even if there is widespread frustration on how Privacy Sandbox was managed.

So, with Google’s web browser at stake in a D.C. courtroom — AI rivals such as OpenAI and Perplexity are expressing an interest in purchasing the web browser if the DOJ forces a sale — a red-faced rollback on third-party cookies may be the preferred sacrifice if Google is to save its data firehose Chrome.  

If you feel strongly about any of the issues discussed above, then feel free to get in touch – no PR pitches please.