Google reportedly offered the US government to split its ad-tech business, which allows companies to place ads on Internet and and apps, into a separate entity under the Alphabet umbrella, to avoid an antitrust lawsuit.
According to the Wall Street Journal, the deal was part of multiple concessions the tech giant offered the US Department of Justice to avoid lawsuits alleging anti-competitive practices.
The US Justice Department is conducting a probe into allegations that “Google abuses its role as both a broker and auctioneer of digital advertisements to steer itself business at the expense of rivals”, and preparing a lawsuit that could be announced soon.
In a 64 page complaint with 194 numbered items, the US Justice Department and 11 states sued Google in October 2020 for antitrust violations, alleging that it weaponised its dominance in online search and advertising to kill off competition and harm consumers.
The lawsuit marks the US government’s biggest move since its case against Microsoft more than 20 years ago. This comes after 15 months of investigation and could be the opening scene of more antitrust actions against other Big Tech companies.
Reacting to the WSJ report that came out on Friday, a Google spokesperson said that they have been engaging constructively with regulators to address their concerns.
“As we’ve said before, we have no plans to sell or exit this business. Rigorous competition in ad technology has made online ads more relevant, reduced fees, and expanded options for publishers and advertisers,” the company spokesperson was quoted as saying in the report.
Not just the US, Google is facing anti-trust probes in the UK and India too.
The UK competition watchdog in May opened a second investigation into Google’s unfair practices in ad tech, following the launch of a probe into Google and Meta’s ‘Jedi Blue’ agreement.
The Competition and Markets Authority (CMA) is investigating whether Google has broken the law by restricting competition in the digital advertising technology market.
“We’re worried that Google may be using its position in ad tech to favour its own services to the detriment of its rivals, of its customers and ultimately of consumers,” said Andrea Coscelli, the CMA’s Chief Executive.
The CMA is assessing whether Google’s ‘ad tech stack’ practices may distort competition.
In July 2021, the French regulator closed a similar case against Google having imposed a fine and secured commitments.
In March this year, the Competition Commission of India (CCI) ordered an investigation into complaints against Google for abusing its dominant position related to news referral services and Google ad-tech services in the Indian online news media market.
The CCI found that prima facie, these allegations of abuse of dominant position are under the purview of the Competition Act, 2002 and requires a detailed investigation by the Additional Director General.
