Google proposes reorganizing ad business to ward off US antitrust case: Report

Google has begun offering concessions in an attempt to avoid growing pressure from regulators and antitrust lawsuits.

Google is reportedly considering splitting the parts of its business that handled online advertising into a separate company under the parent organization Alphabet, according to the Wall Street Journal. This offer arises as the search engine faces scrutiny over its dominance in the digital advertising business.

“We have been engaging constructively with regulators to address their concerns,” a Google spokesman said in a statement. “As we’ve said before, we have no plans to sell or exit this business.”

He added: “Rigorous competition in ad technology has made online ads more relevant, reduced fees, and expanded options for publishers and advertisers.”

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The Justice Department declined to comment. It remains unclear if this simple change in business model and assets will satisfy the DOJ or if more structural changes to the company’s prominent marketing platform are required.

The DOJ is not the only one with its eyes on Google for its ad tech. The search engine currently faces an investigation from the European Union over allegations of anticompetitive conduct involving its video streaming service, Youtube. The company has offered to allow competitors to broker the sale of ads directly on the platform, according to the Journal, thus removing Google Ads from being the middle man.

The DOJ has been performing a multiyear investigation into allegations that Google has mishandled its role in selling and auctioning digital advertisements. The lawsuit, which the DOJ filed in October 2020, aims “to restrain Google LLC from unlawfully maintaining monopolies in the markets for general search services, search advertising, and general search text advertising in the United States through anticompetitive and exclusionary practices, and to remedy the effects of this conduct.”

Legislators have also made additional pushes to change Google’s ad business. Sen. Mike Lee in May introduced the Competition and Transparency in Digital Advertising Act, a bill that would ban online companies with more than $20 billion in annual digital ad revenue from participating in more than one part of the digital advertising process.

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If Google decides to follow through with its change in business model, it would significantly affect the $150 billion advertising business and tens of millions of users it currently has.