Google reportedly offered to split ad business to evade possible US antitrust lawsuit
What do you want to know
- Google reportedly offered some concessions to thwart a potential antitrust lawsuit by the Justice Department.
- The company is reportedly proposing to spin off part of its ad tech business into a separate company under Alphabet.
- However, the US government may prefer asset sales to Google concessions.
Google may be feeling the pressure of the US government’s crackdown on its ad tech business. The company reportedly made some concessions to try to avoid a possible antitrust lawsuit from the US Department of Justice targeting its digital ad technology platform.
According to the Wall Street Journal (opens in a new tab), Google has proposed to spin off parts of its ad tech business into a new venture under Alphabet, its parent company. This means that the search giant is simply offering to move money by reorganizing this business into a new subsidiary within the same organization.
Google’s alleged concessions come months after some US senators reportedly planned to introduce a new bill targeting its ad technology platform. Utah Sen. Mike Lee is said to have led efforts to break the stranglehold of Google and other tech giants on the digital advertising market.
The bipartisan bill would target Google’s businesses that auction and serve ads on the web and apps. The US government has cracked down on how Google operates on this front, as it participates in auctions run by its own platform. Google’s huge advertising business has also come under scrutiny from EU antitrust regulators.
In the United States, regulators fear the Mountain View-based giant is favoring its own business over its rivals. The bill was supposed to prohibit Google and other tech giants from controlling multiple parts of the digital advertising supply chain.
However, it remains to be seen whether the DOJ will accept Google’s concessions or require the company to sell parts of its ad technology platform. The WSJ reports that the US government seems to prefer the latter to the former.
It is uncertain whether Google will agree to sell its ad technology business. Late last year, the company reported a 41% increase in Q3 2021 compared to the same period a year earlier. Growth was driven by advertisements.
Android Central has contacted Google for comment and will update this article once we receive a response.