August 16, 2022

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Google offered ad business separation to fend off a new look: WSJ

Google offered ad business separation to fend off a new look: WSJ

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CNBC

The Google It offered to split parts of its ad technology business into a separate subsidiary of its parent company Alphabet to stave off an expected second antitrust lawsuit from the Department of Justice, The Wall Street Journal reported on Friday.

Such a franchise would keep the advertising business under the Alphabet umbrella but still represent a significant change in the digital advertising landscape, as The Google A big player on both sides of the market. While the most famous is its search engine, Google The main business is online advertising. Alphabet reported $257 billion in revenue for 2021.

But it is not clear whether the offer will satisfy the Justice Department.

The department’s antitrust chief, Jonathan Kanter, was adamant that he would rather go to court than accept settlements. Kanter said in a speech at the antitrust division of the New York State Bar in January that the court’s published opinions are necessary to move the law forward.

“In short, we will resort to remedies – not settlements,” Kanter said. “We cannot bargain if there is a violation of the law.” He said at that time.

Kanter has been barred from working on Google’s antitrust investigations while the Justice Department determines whether he should step down based on previous work by Google competitors, according to a report in May in Bloomberg Citing unnamed sources. The Ministry of Justice did not confirm the report. But his colleagues leading the investigation will likely respect his philosophy if that is the case.

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The magazine reports that a new antitrust lawsuit over Google’s ad technology business may come as soon as this summer, according to sources.

A spokesman for the Ministry of Justice declined to comment on the report.

“We have worked 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 wide range of publisher and advertiser partners in a highly competitive sector.”

However, according to the magazine’s report, Google’s proposal would include keeping the ad tech business under its own owner, not selling it entirely. The spokesman refused to address this point specifically.

Created in 2015, the alphabet It is essentially a holding company for Google, which generates nearly all of its revenue and profits. Google has long portrayed itself as a technology company and has invested in many far-reaching areas of technology – such as internet search, phones, artificial intelligence, self-driving cars, and health technology.

Google has created other companies, such as self-driving car company Waymo and its life sciences company Verily, while keeping it under the Alphabet umbrella.

Google was The market leader in online advertising For more than a decade. Over the years, it has built and acquired a large number of advertising technology tools that enable content publishers to make money with ads and allow ad buyers to find the audience they want on Google search, YouTube, maps, and other online websites.

A new lawsuit will add to the massive legal challenges Google faces over its alleged dominance of several companies.

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The Ministry of Justice introduced the long-awaited antitrust measures lawsuit against The Google In 2020, the first time a serious antitrust charge has been brought against Google at the federal level in its home country.

Google also faces separate lawsuits from large coalitions of state attorneys general, including one led by Texas Claims illegal monopoly in the online advertising market.

The company has also faced scrutiny outside the US, most notably from Europe, where it has been hit with multiple competition fees, including one due to a shopping price comparison service that was It was upheld by a European court.

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