Google Avoids Breakup of Ad Business After Federal Judge Rejects Antitrust Proposal

A federal judge has refused to order Google to break up part of its advertising business, but did order changes to its operations to address antitrust issues. This decision comes at the end of a long legal battle initiated by the U.S. government against Google in 2023, which alleged that the tech giant operates a monopoly in the digital advertising space.

The judge accepted 'most of the parties' proposed behavioral remedies,' but rejected the government's proposals to force divestiture of parts of Google's ad business and make the code that powers its tools for publishers public. The exact details of the changes remain unclear, as the final opinion remains sealed for 14 days while the parties request redactions for confidential information.

Google's ad revenue reached nearly $300 billion in 2025, and it hit $81.63 billion in the second quarter of 2026 alone. The company has avoided being forced to divest a portion of its business before, in September 2025, a judge ruled that Google didn't have to sell off its Chrome browser as part of an antitrust case.

Google is shifting its focus toward AI, with the launch of its Gemini 3.7 model in August intended to compete with rivals Anthropic and OpenAI on agentic and coding tasks. Alphabet, Google's parent company, expects to spend up to $205 billion in 2026, and spending will increase even further in 2027 as it ramps up investments in AI and data centers.

The Department of Justice's Antitrust Division said that while the court rejected its proposal to break apart tools that help small businesses reach new customers, they are pleased with the substantial relief ordered in the Google Ad Tech case. They will be evaluating appropriate next steps.