Google Offered To Start Ad Company To Avoid New Lawsuit: WSJ

Google has offered to spin off part of its ad tech business into a separate company under its parent company Alphabet to avoid an expected second antitrust lawsuit from the Justice Department, The Wall Street Journal reported on Friday.


Such a concession would keep the advertising business under the Alphabet umbrella, but would still represent a significant shift in the digital advertising landscape, in which Google is a massive player on both sides of the market. Although the best known for its search engine, Google’s core business is online advertising, and Alphabet reported revenue of $257 billion for 2021.

But it’s unclear whether the offer would satisfy the DOJ.

The Department’s antitrust chief, Jonathan Kanter, has been adamant that he would rather go to court than agree to settlements. Kanter said during a speech to the New York State Bar Association’s Antitrust Section in January that published court opinions are critical to advancing the law.

“In short, we will seek remedies – not settlements. We cannot compromise if there is a violation of the law,” Kanter said at the time.

Kanter has been barred from working on Google’s monopoly investigations while the DOJ considers whether to recuse himself based on past work for Google rivals, according to a May report in Bloomberg (citing anonymous sources The Justice Department has not confirmed the report, but it is likely that its colleagues leading the investigation would honor its philosophy if it does.

The Journal reported that a new antitrust lawsuit over Google’s ad tech business could take place as early as this summer, sources say.

A Justice Department spokesperson declined to comment on the report.

“We have engaged constructively with regulators to address their concerns,” a Google spokesperson said in a statement. “As we’ve said before, we have no plans to sell or exit this business, and we are deeply committed to delivering value to a broad range of publisher and advertiser partners in an industry highly competitive. »

Still, according to the Journal report, Google’s proposal would involve keeping the ad-tech company under one owner, not selling it entirely. The spokesperson declined to address this specific point.

Created in 2015, Alphabet is essentially a holding company for Google, which generates almost all of its revenue and profits. Google has always marketed itself as a technology company and has invested in many high-profile technology areas, such as internet search, phones, artificial intelligence, self-driving cars and health technologies.

Google has created other ventures, like its self-driving car company Waymo and its life sciences company Verily, while keeping them under the Alphabet umbrella.

Google has been the market leader in online advertising for over a decade. Over the years, he has built and acquired a host of ad technology tools that allow content publishers to make money from advertising and allow ad buyers to find the audience they want on Google Search, YouTube, Maps and other websites on the Internet.

A new lawsuit would add to the already enormous legal challenges Google faces over its alleged dominance in multiple businesses.

The Justice Department filed its long-awaited antitrust lawsuit against Google in 2020, marking the first time a serious antitrust charge had been brought against Google at the federal level in its home state.

Google also faces separate lawsuits from major coalitions of state attorneys general, including one led by Texas that alleges unlawful monopolization of the online advertising market.

The company has also come under scrutiny outside the United States, notably in Europe, where it has been hit with multiple competition charges, including one for its shopping comparison service which was confirmed by a European court.

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