A PYMNTS Company

Google Argues Ad Exchange Breakup Would Disrupt Digital Ad Market

By  |  October 5, 2025

Alphabet Inc.’s Google has spent the past week defending itself in a Virginia federal court, contending that dismantling its advertising exchange would be too disruptive, complex, and potentially damaging to the broader online advertising ecosystem. According to Bloomberg, the company is fighting a U.S. Justice Department proposal that would force it to sell its ad exchange, AdX, in an effort to restore competition to the digital advertising market.

    Get the Full Story

    Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

    yesSubscribe to our daily newsletter, PYMNTS Today.

    By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.

    Over several days of testimony, Google witnesses described a scenario in which a court-ordered divestiture could shake up a business generating nearly $15.9 billion in revenue by 2025, per Bloomberg’s review of market estimates from research firm Emarketer. Company representatives argued that smaller web publishers could face degraded ad services, while uncertainty in the marketplace might deter buyers. The trial stems from Judge Leonie Brinkema’s earlier finding that Google unlawfully monopolized both the ad exchange market and the publisher-side ad server market.

    The Justice Department has proposed that Google sell AdX and disclose how its ad server selects ads for display. If that measure fails to restore fair competition, prosecutors have suggested requiring the company to divest its ad server as well. According to Bloomberg, Google instead wants to integrate its systems with an open-source alternative known as Prebid and has promised to abandon certain auction advantages — including “first look” and “last look” mechanisms — that were deemed anticompetitive by the court.

    Much of the courtroom debate has centered on Google’s claim that separating AdX from its broader advertising infrastructure would be technologically challenging. Company engineers testified that AdX is deeply intertwined with Google Ad Manager, which combines the ad exchange and publisher server functions. Glenn Berntson, an engineering director for Google Ad Manager, told the court that while AdX’s software could theoretically be copied, it “can’t run without Google’s infrastructure.”

    Related: Google Asks US Supreme Court to Halt Epic Games Play Store Ruling

    Heather Adkins, the company’s vice president of security engineering, described the relationship between the two systems as “tightly coupled” and compared it to a woven fabric that cannot easily be unraveled. The Justice Department countered that AdX could instead operate using tools available through cloud providers, including Google’s own cloud platform. However, Adkins testified that even if equivalent tools exist, they may not function identically.

    Jason Nieh, a Columbia University computer science professor testifying on Google’s behalf, said the company’s infrastructure was purpose-built for performance and scalability, likening it to an elite athlete whose unique abilities can’t easily be replicated. Per Bloomberg, Nieh suggested that separating AdX might take at least five years and expressed doubts about whether such a divestiture is even feasible.

    As the trial continues, the case could set a major precedent for how regulators address market dominance in the digital advertising sector — one where, according to Bloomberg, Google still holds an estimated 56% share of the display ad exchange market.

    Source: Bloomberg