Google warns open web advertising faces rapid decline amid breakup demands

Google LLC warned the Eastern District of Virginia on September 5, 2025, that forcing divestiture of its advertising technology would accelerate the "already in rapid decline" open web display advertising market. The company's 24-page memorandum argues that structural remedies would harm publishers who currently depend on open web display revenue at a time when the market faces unprecedented transformation.

According to internal Google data cited in the court filing, only 11 percent of display advertising impressions purchased by AdWords advertisers were for open-web display in January 2025. This represents a dramatic decline from over 40 percent in January 2019, demonstrating what Google characterizes as fundamental shifts in digital advertising consumption patterns.

"The fact is that today, the open web is already in rapid decline and Plaintiffs' divestiture proposal would only accelerate that decline, harming publishers who currently rely on open-web display advertising revenue," according to Google's filing. The company argues that courts should avoid intervening "to reshape an industry that is already in the midst of being reshaped by market forces."

Connected TV advertising has emerged as what industry sources describe as "the fastest-growing advertising channel in the U.S." Major streaming providers including Netflix and Disney have redirected substantial investments toward television advertising infrastructure. Netflix launched an in-house advertising suite with Magnite partnership support, while Disney expanded its streaming advertising capabilities across multiple platforms.

Retail media advertising represents another rapidly growing sector that diverts spending from traditional open web publishers. According to the filing, retailers "of all sizes" have made enormous investments in advertising capabilities, with $60 billion expected to be spent in retail media during 2025. Amazon invested heavily in demand-side platform partnerships with TV providers specifically "to clobber rivals The Trade Desk and Google in a key area of advertising."

Artificial intelligence continues reshaping advertising technology at what Google witnesses characterized as "weekly" intervals. Meta has launched AI tools with stated aims of "fully automating ad creation using AI," while sell-side providers like Index Exchange have integrated generative AI to power advertising curation capabilities. Immensely popular AI products like Perplexity have begun monetizing through advertising, creating entirely new publisher categories.

According to testimony cited in Google's filing, AI will cause "new disruptions into the market on a weekly basis," creating a "wild-west scenario" that remains extremely difficult to predict. These technological shifts fundamentally alter how digital advertisements are created, targeted, and consumed across all formats and platforms.

Google's major advertising technology competitors have uniformly directed investments toward rapidly growing formats rather than traditional open web display. The Trade Desk partnered with Spotify to launch a digital audio advertising exchange, while Magnite expanded partnerships with Samsung Ads to support television advertising capabilities. Amazon's advertising division focused investments on streaming television partnerships rather than traditional web display inventory.

The company warns that divestiture would create perverse incentives that accelerate open web decline. According to the filing, forcing Google to divest AdX and DFP for open web display while allowing continued operation of advertising tools for other formats would "incentivize Google to shift the resources it invests in serving open-web publishers to serving publishers who prioritize other formats, like app and CTV."

Publishers particularly vulnerable to these market shifts include traditional media companies that have not successfully diversified beyond open web display advertising. According to the court's liability opinion, open web display advertising revenue remains "essential" for businesses including "news, media, and other online publishers' businesses," specifically citing companies "such as The New York Times or The Wall Street Journal."

Elimination of integration efficiencies within Google's advertising technology stack would likely drive advertisers toward alternative formats that provide superior return on investment. "Advertisers will vote with their feet and accelerate the existing trend of shifting spend to non-open web display ad formats," the filing states. Automated AI-powered advertising tools programmed to maximize performance would accelerate this spending shift even faster.

According to PPC Land's analysis, smaller publishers remain particularly dependent on open web display revenue streams and lack resources to diversify into emerging advertising formats. The platform has documented how independent advertising technology companies struggled to compete as market forces shifted toward integrated platforms and alternative inventory sources.

The Washington Post Editorial Board characterized the regulatory challenge as "reshaping a market that's already being reshaped," noting the "formidable challenge" courts face when intervening in rapidly transforming technology sectors. Google cites this analysis to support arguments against structural intervention during periods of fundamental market transformation.

Google's behavioral remedy proposal aims to preserve open web display advertising opportunities while addressing anticompetitive conduct. The company proposes enabling publishers to access AdX demand through rival ad servers and eliminating pricing restrictions that prevented publishers from optimizing revenue across multiple demand sources.

The proposed monitoring trustee structure would oversee implementation of technical integrations between Google's products and industry consortium Prebid. According to the filing, these connections would give publishers choices to "use AdX with Prebid and not DFP; DFP with Prebid and not AdX; or even AdX and DFP together, but with Prebid sitting in between."

Industry observers have noted the tension between preserving competition in declining markets versus allowing natural market evolution. According to previous coverage, antitrust enforcement in rapidly changing technology sectors poses unique challenges for courts attempting to balance competitive concerns against innovation incentives.

European regulators reached different conclusions about the viability of behavioral remedies in digital advertising markets. According to Google's filing, the European Commission determined that "each time a practice was detected by the industry, Google subtly modified its behavior so as to make it more difficult to detect, but with the same objectives, with the same effects."

The remedies decision will determine whether courts can effectively address monopolization in markets undergoing fundamental technological transformation. Publishers advocating for structural remedies argue that behavioral changes would be insufficient to restore competitive conditions, while Google contends that divestiture would harm the publishers such remedies aim to protect.

Market data suggests that traditional open web display advertising faces permanent structural challenges beyond Google's conduct. The growth of walled garden platforms, streaming television advertising, and AI-powered content creation has created alternative inventory sources that compete directly with traditional web publishers for advertiser spending.

According to Google's technical analysis, divestiture would require "unprecedented technological project of ripping 'AdX' and 'DFP' out of Google's core infrastructure" that has supported these products for over a decade. The resulting products would operate in "foreign environment" without the specialized infrastructure that currently enables efficient processing of "hundreds of billions of ad requests a day."

Timeline

• September 5, 2025: Google submits behavioral remedy proposal highlighting open web decline
• August 29, 2025: Dotdash Meredith files lawsuit citing advertising technology monopolization impact on publishers
• August 15, 2025: Court documents reveal technical complexity of advertising technology divestiture
• August 5, 2025: Former Google executive exposes manipulation schemes targeting open web publishers
• August 4, 2025: OpenX lawsuit details destruction of independent advertising technology innovation
• April 17, 2025: Court finds Google monopolized publisher ad server and ad exchange markets 
• January 2023: Government files suit alleging systematic harm to open web publishers

Summary

Who: Google LLC argues against divestiture demands that would affect publishers dependent on open web display advertising revenue, while the Department of Justice seeks structural remedies for advertising technology monopolization.

What: Google contends that forced breakup would accelerate the decline of open web display advertising already facing competition from Connected TV, retail media, and AI-powered alternatives that have reduced its share from 40 percent to 11 percent since 2019.

When: The memorandum filed September 5, 2025, precedes remedies proceedings scheduled for September 22, 2025, addressing market conditions that have transformed since the January 2023 lawsuit filing.

Where: The Eastern District of Virginia will determine remedies for Google's advertising technology monopoly in markets where open web display advertising competes with rapidly growing alternative formats.

Why: Google argues that divestiture would harm publishers by eliminating advertising technology efficiencies and accelerating advertiser migration to non-open web formats during a period of fundamental market transformation driven by AI and streaming television growth.

PPC Land explains

Open Web Display Advertising: Digital advertisements appearing on traditional websites that users purchase through third-party advertising technology tools rather than direct relationships. This format excludes social media platforms, search engines, mobile applications, and streaming video services. The market has declined from 40 percent to 11 percent of Google's display advertising impressions between 2019 and 2025, reflecting fundamental shifts in how consumers access digital content and how advertisers reach target audiences.

Divestiture: The forced sale or separation of business assets or subsidiaries, representing the most severe antitrust remedy available to courts. Google characterizes divestiture as "radical" and "extreme," arguing it should be reserved for cases involving unlawful mergers or acquisitions rather than monopolization through business conduct. The company contends that separating AdX or DFP from its integrated infrastructure would create inferior products while harming publishers dependent on current advertising technology efficiencies.

Connected TV: Streaming television services and platforms that deliver video content through internet connections rather than traditional broadcast or cable systems. This advertising format has emerged as the fastest-growing channel in the United States, with major providers like Netflix, Disney, and Amazon making substantial investments in advertising capabilities. Connected TV advertising competes directly with open web display for advertiser budgets and has contributed to the declining share of traditional web-based advertising formats.

AdX: Google's advertising exchange platform that facilitates real-time auctions between publishers selling advertising inventory and advertisers seeking to purchase ad placements. The Eastern District of Virginia found that Google monopolized the ad exchange market for open web display advertising, with the court determining that Google used anticompetitive practices to maintain its dominant position. AdX generated significant revenue for Google while serving as a critical component of the integrated advertising technology stack.

Publishers: Website operators and content creators who monetize their digital properties through advertising revenue, particularly those dependent on open web display advertising for financial sustainability. Traditional media companies including newspapers and digital content providers face particular vulnerability as advertising spending shifts toward alternative formats like Connected TV and retail media. Publishers have been harmed by Google's monopolistic practices according to court findings, yet also face declining market conditions independent of antitrust violations.

DFP (DoubleClick for Publishers): Google's publisher ad server platform that helps website operators manage, optimize, and deliver advertising content to their audiences. The court found that Google illegally tied DFP to AdX, forcing publishers to use both products together to access unique advertising demand. Google's proposal would eliminate this tying arrangement while preserving publisher access to advertising demand through alternative technical integrations with rival ad servers and industry consortium Prebid.

Artificial Intelligence: Advanced computing technologies that automate advertising creation, targeting, and optimization processes across digital marketing platforms. AI disruption occurs at what witnesses characterized as "weekly" intervals, creating unpredictable market conditions that challenge traditional regulatory approaches. Meta aims to "fully automate ad creation using AI," while new AI-powered publishers like Perplexity have begun monetizing through advertising, fundamentally altering the competitive landscape for traditional open web publishers.

Retail Media: Advertising formats offered by retailers and e-commerce platforms that leverage customer purchase data and shopping behavior to target advertisements. This sector expects $60 billion in spending during 2025, representing substantial advertiser budget that previously supported open web display advertising. Amazon has invested heavily in retail media capabilities to compete with traditional advertising technology providers, contributing to the broader shift away from conventional web-based advertising inventory.

Behavioral Remedies: Antitrust relief measures that modify business practices and conduct while preserving existing corporate structure and ownership. Google proposes behavioral remedies including technical integrations with rival ad servers, elimination of pricing restrictions, and appointment of monitoring trustees to oversee compliance. The company argues these measures would restore competition without dismantling products that millions of customers depend upon, while critics contend behavioral changes would be insufficient given Google's history of circumventing restrictions.

Market Forces: Economic and technological factors driving structural changes in digital advertising independent of antitrust violations or regulatory intervention. These forces include consumer migration to streaming video platforms, growth of social media advertising, expansion of retail media capabilities, and AI-powered content creation. Google argues that courts should avoid intervening in markets already undergoing fundamental transformation, while regulators contend that monopolistic practices prevent natural competitive responses to these changing conditions.