According to the Wall Street Journal, Google has proposed segregating parts of its ad-tech business to avoid an antitrust lawsuit by the US Department of Justice.
Google is proposing to restructure the company‘s division, which auctions and places web ads, into a separate company under Alphabet, Inc, the search engine’s parent company. Depending on the assets included, this could be worth billions of dollars.
Proposal Suggests Investigation Is Nearing Completion
The Justice Department is investigating allegations that Google has long abused its power as a digital ad broker and auctioneer. In October 2020, the company sued the company over claims it was illegally using its power to cripple competitors.
The department is currently preparing a lawsuit over alleged anti-competitive practices, which could be filed sometime this summer. On the same subject : Classroom Champions: The teacher wants digital microscopes for science class.
Google Under Fire From Several Directions
The latest indictment follows three European Union antitrust cases in which Google was fined $1. This may interest you : Tech Tracker: The store’s prototypes continue to get more high-tech; Kraft will launch a restaurant in the metaverse.6 billion for abusing its position as the dominant search engine between 2006 and 2016.
The search engine is also facing a lawsuit from several states, accusing the company of having a monopoly. However, Google has requested that the case be dropped, as it is inaccurate and unfounded.
In addition, a bipartisan bill was introduced in Congress in May that aims to split the company’s digital advertising business. The Competition and Transparency in Digital Advertising Act would ban companies that process more than $20 billion in digital advertising transactions annually from participating in more than one part of the digital advertising process.
In a statement, a Google spokesperson acknowledged growing competition in online ad technology, insisting there were “no plans to sell or terminate this business.”
Split Could Change Process Of Ad Bidding, Lower Costs
Whether the Department of Justice agrees to this proposal or the case goes to court, the latest allegation could have major implications for digital marketers. To see also : Google says it’s time to pay for longtime small business users.
Splitting up Google’s ad-tech division could open the door for other digital ad companies to claim a larger share of the market. This increased competition can lead to lower prices as each company tries to undercut its rivals for its share of ad revenue.
Last year, Google’s ad revenue was over $209 billion.
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