CNBC: Sundar Pichai, CEO of Alphabet and Google, interviewed by Deirdre Bosa.
Google has offered to spin off part of its ad tech business into a separate company under its parent company Alphabet to stave off a second expected Justice Department antitrust lawsuit, The Wall Street Journal reported Friday.
Such a concession would keep the advertising business under the Alphabet umbrella, but would still represent a significant change in the digital advertising landscape, in which Google is a major player on both sides of the market. Although best known for its search engine, Google’s core business is online advertising. Alphabet reported $257 billion in revenue for 2021.
But it’s unclear whether the offer would satisfy the DOJ.
The department’s antitrust chief, Jonathan Kanter, has been adamant that he’d rather go to court than agree to settlements. Kanter said in a speech to the Antitrust Section of the New York State Bar Association in January that published opinions from the courts were critical to advancing the law.
“In short, we will pursue remedies – not settlements. We cannot compromise on violations of the law,” Kanter said. said at the time.
Kanter has been barred from working on Google’s monopoly investigations while the DOJ determines whether he should recuse himself based on past work for Google rivals, according to a May report from Bloomberg citing anonymous sources. The DOJ has not confirmed the report. But it is likely that his colleagues at the head of the investigation would respect his philosophy if that were the case.
The Journal reported that a new antitrust lawsuit regarding Google’s ad tech business could take place as soon as this summer, sources say.
A DOJ spokesperson declined to comment to CNBC on the report.
“We have engaged constructively with regulators to address their concerns,” a Google spokesperson said in a statement to CNBC. “As we’ve said before, we have no plans to sell or exit this business, and we are deeply committed to bringing value to a broad range of publisher and advertiser partners in an industry highly competitive.”
Still, according to the Journal report, Google’s proposal would involve keeping the ad-tech company under one owner, not selling it entirely. The spokesperson declined to address this specific point.
Founded in 2015, Alphabet is essentially a holding company for Google, which generates almost all of its revenue and profits. Google has always marketed itself as a technology company and has invested in many high-profile technology areas, such as internet search, phones, artificial intelligence, self-driving cars and health technologies.
Google has created other ventures, like its self-driving car company Waymo and its life sciences company Verily, while keeping them under the Alphabet umbrella.
Google has been the market leader in online advertising for over a decade. Over the years, he has built and acquired a host of ad technology tools that allow content publishers to make money from advertising and allow ad buyers to find the audience they want. on Google Search, YouTube, Maps and other websites on the Internet.
A new lawsuit would add to the already enormous legal challenges Google faces due to its alleged dominance over multiple companies.
The DOJ filed its long-awaited antitrust lawsuit against Google in 2020, marking the first time a serious antitrust charge has been brought against Google at the federal level in its home state.
Google also faces separate lawsuits from major coalitions of state attorneys general, including one led by Texas that alleges illegal monopolization of the online advertising market.
The company has also come under scrutiny outside the United States, notably in Europe, where it has come under fire with multiple competition accusations, including one over its shopping comparison service which has been upheld by a European court.
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