With a potential antitrust lawsuit looming over its ad-tech division, Google looks to make several concessions, leading to the division of several business areas or the creation of a separate entity under its parent company Alphabet Inc.
The aspect in question is Google’s ad business, the sector responsible for auctioning off online ad space and handling the placement of ads on websites for higher client visibility.
It is expected that the new business Google plans to spin off may be worth tens of billions of dollars based on potential assets.
This could be the second antitrust case against Google. Nearly two years ago, the Justice Department took the company to court over using anti-competitive practices to maintain its position as the leading online search engine. The case is ongoing, and Google executives continue to deny the allegations.
Not Enough of a Concession
However, spinning off its ad-tech business may not be enough to keep the tech giant out of hot water with US regulators.
Antitrust officials from the Department of Justice called upon Google to make significant structural changes to its ad-tech division rather than simply changing its business practices. Indeed, over the past few years, Justice officials have investigated allegations wherein Google is said to have abused its role as a broker of digital advertisements to drive up its business.
It is expected that the Department will file a lawsuit against Google in the coming weeks based on findings that its ad-tech practices have been anti-competitive.
Google, however, was quick to issue a statement that it has been actively addressing regulatory concerns, adding that it has no plans to either sell off its assets or leave the ad-tech sector. In fact, a spokesperson for the company even declared that its presence in the industry has made the competition more rigorous, leading to more relevant ad placements, reduced fees, and giving both publishers and advertisers a more diverse range of options from which they could choose.
Similar Issues in Europe
A potential case in the US isn’t the only problem Google faces when it comes to allegations of a possible monopoly. It also faces similar issues in the European Union, where the company has offered to settle charges regarding anti-competitive conduct about its online media service YouTube.
According to a spokesperson for the European Commission, investigations regarding anti-competitive practices involving Google’s ad-tech business are now ongoing. The EC likewise shares relevant findings about the case with the US Justice Department.