Google suggests splitting up the Ad-Tech business to prevent antitrust lawsuits

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According to the Wall Street Journal, Google has offered to separate parts of its ad technology business to prevent an antitrust lawsuit from the US Department of Justice.

Google is proposing to restructure the company division that does auctions and places web ads into a separate subsidiary of Alphabet, Inc. , the parent company of the search engine. Depending on the listed assets, their value can reach billions of dollars.

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The proposal suggests that the investigation is nearing completion

The Department of Justice is investigating allegations that Google has abused its power as a digital advertising and auction medium for some time. Most recently in October 2020, he sued the company over allegations that it was illegally using its power to cripple competitors.

The department is currently preparing a lawsuit alleging anti-competitive practices, which could be filed this summer.

Google is under fire from many directions

This latest charge comes on the heels of three antitrust lawsuits from the European Union, in which Google was fined $1.6 billion for abusing its position as a dominant search engine between 2006 and 2016.

The search engine is also facing a lawsuit from several states accusing the company of a monopoly. However, Google called for the case to be dismissed, saying it was inaccurate and baseless.

Additionally, a bipartisan bill was introduced to Congress in May that seeks to dismantle the company’s digital advertising business. The Digital Advertising Competition and Transparency Act prohibits companies that process more than $20 billion in digital advertising transactions each year from participating in more than one part of the digital advertising process.

In a statement, a Google spokesperson acknowledged the growing competition in online advertising technology while insisting that “there are no plans to sell or exit this business.”

Splitting can change the ad auction process, lower costs

Whether the Department of Justice accepts this proposal or the case goes to trial, this latest claim could have a huge impact on digital marketers.

If Google’s ad technology division is separated, it may open the door for other digital advertising companies to claim a larger market share. This increased competition may lead to lower prices as each company seeks to downsize its competitors to get its share of advertising revenue.

Last year, Google’s advertising revenue exceeded $209 billion.


source: The Wall Street Journal

Featured Image: Byemo / Shutterstock

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