Google is feeling the pressure of multiple regulatory probes into its ad-tech business, a lucrative arm of that netted north of A$46 billion last year.
Google has offered a number of concessions in a bid to avoid a US antitrust suit that could force the tech giant to divest; one proposal involves spinning off the part of the business that auctions and places advertising on websites and apps into a separate company – albeit a “separate company” under the Alphabet umbrella.
This company would be worth tens of billions. Last year, Google’s brokering ads sales on third-party websites and apps accounted for 12 per cent of Alphabet’s total earnings.
The U.S. Department of Justice is preparing a lawsuit alleging Google’s ad-tech practices are anticompetitive, following a long probe into allegations that Google abuses its role as both broker and auctioneer of online advertising in a way that nets itself more profits, at the expense of rivals.
Google is racing against the clock, according to WSJ’s sources, who say the DOJ’s action could be filed as soon as this summer.
“We have been engaging constructively with regulators to address their concerns,” a Google spokesman said.
“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.”
Parent company Alphabet were similarly non-forthright, saying: “We’re deeply committed to providing value to a wide array of publisher and advertiser partners in a highly competitive sector,”
In the Europe Union, Google has made a separate offer to settle anticompetition charges relating to YouTube.
In that region, Google would allow third-party brokers to sell ads directly on YouTube. Currently, all advertising is funnelled through Google’s own ad-buying tools.
