Google offers to shut down its advertising business to fend off a new lawsuit: WSJ

Google offers to shut down its advertising business to fend off a new lawsuit: WSJ
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CNBC: Alphabet and Google CEO Sundar Pichai interviews Deirdre Bosa.


Google Proposed to split parts of its ad tech business into a separate company under its parent company Alphabet to avoid a pending second antitrust lawsuit from the Justice Department. Wall Street Journal reported Friday.

Such a concession would keep the advertising business under the Alphabet umbrella, but still represents a significant change in the digital advertising landscape. Google a big player on both sides of the market. Most commonly known for its search engine, Google’s the main business is online advertising. Alphabet reported $257 billion in revenue for 2021.

However, it is unclear whether the proposal will satisfy the Ministry of Justice.

Jonathan Kanter, the division’s antitrust chief, is adamant that he would rather go to court than accept deals. In a speech to the New York State Bar Association’s Antitrust Division in January, Kanter said published court opinions are vital to advancing the law.

Kanter, “In short, we will go for a solution, not a solution. If there is a violation of law, we cannot reach a compromise.” he said then.

While Kanter has been barred from working on Google monopoly investigations, the Justice Department is deciding whether to fire him based on his past work for Google rivals. Bloomberg citing anonymous sources. The Justice Department did not confirm the report. However, if that were the case, it is likely that his colleagues who led the investigation would honor the philosophy.

According to sources, the Journal reported that a new antitrust lawsuit regarding Google’s ad tech business could arrive as soon as this summer.

A DOJ spokesperson declined to comment on the report to CNBC.

“We are engaging constructively with regulators to address their concerns,” a Google spokesperson told CNBC. “As we’ve said before, we have no plans to sell or quit this business and are committed to providing value to a wide variety of publisher and advertiser partners in a highly competitive industry.”

Still, according to the Journal’s report, Google’s proposal would not include selling the ad tech business entirely, but keeping it under the same owner. The spokesperson declined to make this particular point.

It was created in 2015, Alphabet it is essentially a holding company that generates nearly all of Google’s revenue and profits. Google has always described itself as a technology company and has invested in technology far-reaching areas such as internet search, phones, artificial intelligence, self-driving cars, and health tech.

Google has deactivated other businesses such as self-driving car company Waymo and life sciences company Verily while keeping it under the Alphabet umbrella.

Google became market leader in online advertising for more than ten years. Over the years it has developed and acquired a range of ad technology tools that allow content publishers to monetize through advertising and allow ad buyers to find their desired audience 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 over multiple businesses.

DOJ files long-awaited antitrust case against Google In 2020, a serious antitrust charge was brought against Google for the first time at the federal level in its home country.

Google also has Texas-led and claiming illegal monopoly online advertising market

The company has also faced scrutiny outside of the US, facing multiple competition charges, particularly in Europe. upheld by a European court.

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