CNBC: Alphabet and Google CEO Sundar Pichai is interviewed by Deirdre Bosa.
CNBC
Google has offered to split parts of its ad tech business into a separate company under its parent company Alphabet in a bid to stave off a second expected Justice Department antitrust lawsuit, the Wall Street Journal reported Friday.
Such a concession would keep the ads business under Alphabet’s umbrella, but still represent a significant shift in the digital advertising landscape, where Google is a massive player on both sides of the market. Although Google is best known for its search engine, Google’s main business is online advertising. Alphabet reported revenue of $257 billion for 2021.
But it’s unclear if the offer would satisfy the DOJ.
The ministry’s cartel chief, Jonathan Kanter, insists he prefers to go to court rather than accept settlements. Speaking before the Antitrust Section of the New York State Bar Association in January, Kanter said published court opinions are critical to moving the law forward.
“In short, we will remedy – no comparisons. We cannot compromise when there is a violation of the law,” Kanter said at the time.
Kanter has been suspended from working on Google monopoly investigations while the DOJ determines whether he should retire based on previous work for Google competitors, according to a May report in Bloomberg, citing unnamed sources. The DOJ has not confirmed the report. But it’s likely that his colleagues leading the investigation respect his philosophy, if that’s the case.
The Journal reported that a new antitrust lawsuit over Google’s ad tech business could come as early as this summer, according to sources.
A DOJ spokesman declined to comment on the report.
“We have worked constructively with regulators to address their concerns,” a Google spokesman said in a statement. “As we have said, we have no plans to sell or exit this business and we are fully committed to bringing value to a wide range of publisher and advertising partners in a highly competitive sector.”
Still, according to the Journal’s report, Google’s proposal would be to keep the ad tech business under its same owner, rather than sell it outright. The speaker declined to address that specific point.
Founded in 2015, Alphabet is essentially a holding company for Google, generating almost all of its sales and profits. Google has always presented itself as a technology company, investing in many broad areas of technology — such as web search, phones, artificial intelligence, driverless cars, and healthcare technology.
Google has spun off other companies, like its self-driving car company Waymo and its life sciences company Verily, while staying under the Alphabet umbrella.
Google has been the leader in online advertising for well over a decade. Over the years, the company has developed and acquired a range of ad tech tools that enable content publishers to monetize advertising and allow ad buyers to target the audiences they want on Google Search, YouTube, Maps and other sites on the Internet.
A new lawsuit would add to the already formidable legal challenges Google faces over its alleged dominance in several companies.
The DOJ filed its long-awaited antitrust lawsuit against Google in 2020, marking the first time a serious federal antitrust lawsuit had been filed against Google in its home country.
Google also faces separate lawsuits from major coalitions of attorney generals, including one led by Texas, alleging illegal monopoly of the online advertising market.
The company has also come under scrutiny outside the US, particularly from Europe, where it has faced several competition allegations, including one over its shopping comparison service, which was upheld by a European court.
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