Digital illustration of Google logo
Source: Adweek

Google offers a spin off of ad-tech business to avoid US antitrust lawsuit
The lawsuit alleges that Google abuses its clout in the advertising technology business.

Google logo depicted at an event
Google offers concessions to avoid US antitrust lawsuit, proposing a spin off of its ad-tech business.
Source: Wall Street Journal

Alphabet Inc’s Google has reportedly gone on to offer concessions to avoid a potential lawsuit. This US antitrust lawsuit alleges that Google abused its clout in the advertising technology business. The first one to report on the news was Wall Street Journal on Friday, July 8.

According to the proposal, Google spoke about the spin off of these parts of the company’s business. Mainly, the ones that auction and place ads on websites and apps into another company under its parent company. The report stated this company could have the value of about tens of billions dollars..

In a statement this week, Alphabet Inc stated how it was in the process of talking to regulators to discuss the issue. Moreover, it specified how it was not planning to sell or leave the advertising technology business. It stated how it was ‘deeply committed’ to giving value to a broad range of ‘publisher and advertiser partners’ in what is a largely ‘competitive sector.’

As of now, the spokesperson for the Justice Department is yet to acknowledge any requests for a comment on the situation. The antitrust lawyer who is representing companies and publishers in the ad-tech sector is Brandon Kressin. Evidently, he appeared rather skeptical regarding the sufficiency of this offer.

“I don’t see how spinning off the business but keeping it under the Alphabet umbrella would solve the issue, however. Google would still have an incentive to self-preference,” he said.

The department under US President Joe Biden has clearly shown intense preference for asset sales for the resolution of antitrust concerns. Reportedly, asset sales are also known as structural remedies. In October 2020, the US Department for Justice sued Alphabet Inc’s Google. The accusation was of Google’s alleged illegal use of its market muscle to hobble competitors. This time came forward as one of the largest challenges to power and Big Tech influences in years.

In May this year, the competition regulator of Britain came up with its second probe into Google’s advertising practices. It said that the company could have distorted competition and, it might have even illegal giving its own services more advantages. Additionally, the search giant fights probe from European regulators from June 2021. Mainly, the investigation was if its advertising business gave the Alphabet unit an unfair benefit overs its various rivals, along with advertisers.