Consequences of Dissolution of Google’s Digital Advertising Business: The Remedy Requested in the Google Open Web Display Advertising Case

Abstract

This paper examines an open question about the potential impact of the relief requested by the U.S. Department of Justice (DOJ) in its case that alleges Google’s management of its digital advertising business violated the Sherman Act: Would the relief increase innovation and output or instead decrease it? A model of U.S. total business sales is estimated, and the simulation of the model for the counterfactual scenario with the dissolution of Google’s ad tech stack as requested in DOJ’s 2023 complaint finds that for 2019 the cost for the U.S. manufacturing, wholesale trade, and retail trade sectors would have been between three and four percent of gross domestic product.

Keywords: antitrust; Google; growth, innovation, monopolization; open web display advertising; Sherman Act; technological progress, U.S. Department of Justice

JEL Classification: K21, L16, L41, M37, O3, O4