Google and Meta have come under vast amounts of antitrust scrutiny over the past few years, especially in the US and the EU. It’s important to consider that both firms have more in common than one might think – they are advertising companies.

Regulators have been targeting both companies for alleging abusing monopolistic power in search, for Google, and Meta’s streamlining of properties (i.e. Instagram, WhatsApp, Facebook) to shunt competition. A lot of what’s been missing is the thread that puts their properties together. That would be their respective ad products.

Google

The Verge reported that, “Judge Brinkema found Google “liable under Sections 1 and 2 of the Sherman Act” due to its practices in the ad tech tool and exchange spaces but dismissed the argument that Google had operated a monopoly in ad networks.” In a separate, but previous ruling last year, the courts ruled that Google must break apart properties such as Chrome. By itself, Chrome, YouTube, Android, Gemini, search and more are not the issue; but rather the ad platforms moving through them create a monopoly in the revenue generated in the ad market for which Google owns both the buy and sell side of their advertising exchange.

Separating Chrome out itself, won’t be much of an issue if there are no restraints in Google just forking a version of Chromium, which Chrome is based upon, and creating a new browser. Regardless, Google will still retain its monopoly stemming from their acquisition of DoubleClick which occurred back in 2008. If the DOJ wants to remedy the monopoly, it should look at remediation of controlling both the buy and sell side of the digital advertising economy. In recent years, Google has attempted to diversify their revenues away from majority advertising revenue into other businesses such as its cloud offerings, and acquiring Wiz – a large cloud security firm for $32 billion.

Meta

Now we move on to Meta. Just today, the company announced that its Threads platform will begin offering advertising in a limited capacity, likely to expand just as all other Meta properties do. Like Google, Meta is not immune to litigation. This morning, the EU fined both Apple and Meta for antitrust as well, in a long line of fines for violating the Digital Markets Act (DMA). The European Commission’s issue is one of privacy and violating the “pay or consent” model (using your data without permission and replacing the ad business with a paid version of these services). Like Google, Meta has heavily invested into AI and the metaverse as likely diversification ideas.

Remedies

In many of these cases brought on by the European Commission and the US DOJ and State AGs, the suggested remedy is to break up Alphabet (Google) and Meta into their individual parts. If this were the case, the ad businesses must go along with them. The more properties Google and Meta own and create, the deeper the ad network and revenue. OpenAI has already suggested that it would purchase Chrome from Google should that be the case. But it just creates another problem – another massive tech conglomerate, giving traditional search from Google, a run for its money, like OpenAI, would simply replace the juggernaut with itself. The Sherman Antitrust Act of 1890 has been cited as precedent for the potential breakups, however, this is dated legislation that was passed to deal with Standard Oil and AT&T of the times, not modern big tech.

What’s Next?

Both companies have stated that they will appeal these rulings, and any final decisions will likely take years. In the fast pace that technology moves, we must ask if these two firms will still look and act the same in a 2-to-5-year timeframe? Google’s Gemini and Meta’s Llama LLM’s and AI R&D will rapidly change in just the next 3 months if we can apply recent AI growth trajectories to them.

Like before, Google and Meta will be pressured to monetize AI in a changing landscape where traditional search is upended by agentics. What would current ad networks look like across LLM’s? That is a discussion for later down the road once methodologies are tested.