Antitrust

The European Commission has weighed in on the November decision to block the likes of ChatGPT and Copilot from WhatsApp, and thinks it violates EU antitrust laws. It’s surprisingly fast for the organization, which called the issue “urgent” because of the risk of “irreparable” damage to competition in the nascent AI industry.

The Justice Department reached a proposed agreement with landlord LivCor to resolve claims that it illegally coordinated rent prices with other landlords using algorithmic recommendations from RealPage. The DOJ previously settled with RealPage, and two large landlords involved in the case.

Google and the DOJ just wrapped their two-week remedies trial until closing arguments on November 17th. Judge Leonie Brinkema is still holding out hope for a settlement to avoid the tricky technical issues of a court-ordered remedy.

That’s what Brinkema wanted to know as the case wound down. She wants the parties to consider what kind of committee should be appointed by the court. “That is part of the key of making whatever the final remedy is work,” she said. “I would be very concerned about any monitor who might have any stake in the outcome.”

Google brought back its technical expert Jason Nieh for a brief response to the DOJ’s rebuttal. Nieh claimed that Wheatland’s conception of how the open-sourced final auction logic would work was new and not technically feasible. Brinkema pushed back, saying that her understanding was that all that functionality is “already there” inside DFP and “all they want you to do basically is open the box.” Nieh said that wouldn’t work since the code is always evolving and it would be harder to stick back together with Google’s system.

If the court only imposes behavioral restrictions on Google, Daily Mail Chief Digital Officer Matthew Wheatland warned in the DOJ’s rebuttal, there would still be a “gray area on our decision making process” to switch ad servers since they’d need to be sure the remedies would have “lasting effects” on Google’s actions.

We heard more testimony from Google’s technical expert Jason Nieh this afternoon about why he thinks divesting AdX and DFP would be much harder than the DOJ’s experts said. On Monday, the DOJ will bring DailyMail.com chief digital officer Matthew Wheatland in to testify in its rebuttal case, and may add an expert or two.

Former News Corp ad tech executive Stephanie Layser worries that even if Brinkema limits Google’s bad conduct, it will simply find a new way to make things difficult for publishers in ways that will be hard to detect. Layser said she felt like a “conspiracy theorist” about her suspicions Google was harming her business — until discovery in this case.

Google economic expert Andres Lerner testified that in the world that would have existed previously but for Google’s anticompetitive conduct, Google would still have monopoly power. Yet he generally agreed that remedies should unfetter the market from Google’s anticompetitive conduct. Brinkema said that seemed “inconsistent with the concept that some monopoly power can continue. There’s a tension there.”

Google security engineering VP Heather Adkins testified that while AI can help “autocomplete” some code that might be useful in a forced migration Google’s ad tools, vibe coding doesn’t produce secure enough code yet to make it so that a human doesn’t need to be looped into the process.

Elizabeth Douglas testified in Google’s defense that breaking up the ad tech tools her business relies on would introduce immense uncertainty in the one part of her business that feels relatively stable in terms of set up. But Google’s AI overviews, she said, are also part of the reason for WikiHow’s uncertain future, since they often keep users from clicking through to its pages.

DOJ attorney David Geiger asked Goodwin about his claim that AT&T’s breakup slowed tech progress — was he also aware it accelerated the development of the cell phone? Goodwin said no, and Brinkema interjected, “yeah, but we lost Bell Labs. That’s what people comment on.”

Former investment banker Shane Goodwin, who specialized in divestitures, gave several examples of such deals that later resulted in assets being sold back to the original firm, or didn’t achieve their goals. One example was the Sprint-T-Mobile merger that required a divestiture to Dish that was meant to result in a formidable 5G competitor.

The company continues its defense today after Brinkema declined to pause the case amid the funding gap for the DOJ.

Brinkema says this includes the fact that the expected outcome of this trial is a court order that Google could be held in contempt of court over if it breaks, and a long list of other lawsuits it faces. Wouldn’t these things temper Google’s behavior? Goel says Google likely would comply with a court order, but the problem is that it’s nearly impossible to list all the ways Google might later figure out how to advantage itself again.

PubMatic’s Goel said he didn’t have enough information about what a divested AdX would entail or how much it would cost to know if he would buy it. It’s a stark contrast from the search trial, where AI companies and rival search firms leapt at the chance to buy Chrome.

Rajeev Goel, CEO of rival ad exchange PubMatic, testified that he spoke to Google eight months ago about an issue where its advertiser tool wouldn’t buy some publisher inventory through PubMatic’s exchange. Goel said Google told him that was due to a bug they’re working to fix. Assuming that’s true, he said, Google still stands to make more money if it deprioritizes a fix.

Google executive Nirmal Jayaram, who previously worked on Google’s advertiser tools, warned that a divestiture would likely degrade products for advertisers, and lead more of them to move from open web display ads to other formats that give them a greater return on their investments.

That’s how Google Ad Manager engineering director Glenn Berntson described the difference between a divestiture of AdX that excludes Google’s proprietary infrastructure versus one that includes it. Both are huge undertakings, he said.