CNBC: Sundar Pichai, CEO of Alphabet and Google is interviewed by Deirdre Bosa.
Google has offered to divide parts of its ad-tech business into a separate company under the parent company Alphabet to avert another expected antitrust lawsuit from the Department of Justice, The Wall Street Journal reported Friday.
Such a license will keep the advertising business under the umbrella of the alphabet, but still represent a significant change in the digital advertising landscape, where Google is a massive player on both sides of the market. While best known for its search engine, Google̵[ads1]7;s main business is web advertising. Alphabet reported $ 257 billion in revenue for 2021.
But it is unclear whether the offer will satisfy the DOJ.
The department’s head of antitrust, Jonathan Kanter, has been adamant that he prefers to go to court instead of accepting a settlement. Kanter said in a speech at the New York State Bar Association Antitrust Section in January that published legal statements are crucial to pushing the law.
“In short, we want to prosecute – not reconcile. We can not compromise if there is a violation of the law,” Kanter said at the time.
Kanter has been banned from working on Google’s monopoly investigations while the DOJ decides whether to resign based on previous work for Google rivals, according to a May report in Bloomberg citing unnamed sources. The DOJ has not confirmed the report. But it is likely that his colleagues in charge of the investigation will respect his philosophy if that is the case.
Journal reported that a new antitrust lawsuit against Google’s advertising technology business could come as soon as this summer, according to sources.
A DOJ spokesman declined to comment for comment.
“We have engaged constructively with regulators to address their concerns,” a Google spokesman said in a statement. “As we have said before, we have no plans to sell or close this business, and we are deeply committed to providing value to a wide range of publishers and advertising partners in a highly competitive sector.”
Still, according to Journal’s report, Google’s proposal would mean keeping the ad technology business under the same owner, not selling it completely. The spokesman refused to address the specific point.
Alphabet was created in 2015, and is essentially a holding company for Google, which generates almost all of its revenue and profits. Google has always presented itself as a technology company and has invested in many far-reaching technology areas – such as internet search, telephones, artificial intelligence, self-driving cars and healthcare technology.
Google has spun out other businesses, such as the self-driving car company Waymo and its life sciences company Verily, while keeping them under the umbrella of the alphabet.
Google has been the market leader in online advertising for well over a decade. Over the years, it has built and acquired a number of ad technology tools that enable content publishers to monetize advertising and allow ad buyers to reach the audience they want on Google Search, YouTube, Maps and other Internet sites.
A new lawsuit will add to the already huge legal challenges facing Google due to its alleged dominance across multiple businesses.
The DOJ filed its long-awaited antitrust lawsuit against Google in 2020, marking the first time a serious antitrust charge was filed against Google at the federal level in its home country.
Google is also facing separate lawsuits from major coalitions of state attorneys, including a Texas-led one that alleges illegal monopolization of the online advertising market.
The company has also been investigated outside the United States, particularly from Europe, where it has been criticized with several competition fees, including one for the price comparison service approved by a European court.
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SE: Google is facing a fast and furious pace in lawsuits as the antitrust investigation intensifies