What you need to know
- Google has reportedly offered a few concessions to thwart a potential antitrust lawsuit by the Department of Justice.
- The company is said to offer to split parts of its ad tech business into a separate firm under Alphabet.
- However, the U.S. government could prefer asset sales to Google’s concessions.
Google may be feeling the pressure from the U.S. government’s crackdown on its advertising tech business. The company has reportedly made a few concessions in an attempt to head off a possible antitrust lawsuit from the U.S. Department of Justice targeting its digital ad technology platform.
According to The Wall Street Journal (opens in new tab), Google has proposed to separate parts of its ad tech business into a new firm under Alphabet, its parent company. This means the search giant simply offers to move money around by reorganizing that business as a new subsidiary within the same organization.
Google’s supposed concessions come a few months after some U.S. senators were reportedly planning to introduce a new bill targeting its ad tech platform. Senator Mike Lee of Utah supposedly led the effort to break the stranglehold Google and other tech giants have on the digital ad market.
The bipartisan bill was said to be aimed at Google’s business that auctions and serves ads on the web and apps. The U.S. government has been clamping down on how Google operates on that front because it participates in auctions run by its own platform. Google’s huge ad business has also been scrutinized by EU antitrust regulators.
In the U.S., regulators are concerned that the Mountain View-based giant may be favoring its own business to the detriment of rivals. The bill was supposedly intended to prohibit Google and other tech giants from controlling multiple parts of the digital ad supply chain.
However, it remains to be seen whether the DOJ will accept Google’s concessions or demand that the company sell off parts of its ad tech platform. WSJ reports that the U.S. government appears to prefer the latter over the former.
It’s uncertain whether Google will agree to sell off its ad tech business. Late last year, the company reported a 41% increase in the third quarter of 2021 over the same period in the previous year. The growth was driven by ads.
Divinemercy has reached out to Google for comment and will update this article once we receive a response.