Google Facing Adtech Breakup Heat from DC

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Google parent Alphabet is reportedly considering splitting up parts of its business that handle digital advertising into a separate unit, as a way to avoid antitrust litigation from the U.S. Justice Department as part of an ongoing investigation, according to the Wall Street Journal.

However, it’s not clear whether anything short of an asset sale would satisfy federal regulators who have accused the internet giant of monopolistic power by working both sides of the online ad street, the WSJ reported.

The basic argument is that Google leverages its tools on the publisher side (DoubleClick for Publishers, DoubleClick Ad Exchange) and the advertiser side (DV360 buying tool) as well as in search and keyword bidding (Google AdWords) to exercise market dominance.

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

In June, Alphabet said it would allow will allow rival advertising intermediaries to place ads on YouTube, in a concession to European Union antitrust regulators who are likewise investigating anticompetitive practices, according to Reuters. This move could help Google settle a 2021 EU probe and avoid paying a hefty fine, the news agency reported.

In October 2020, the Justice Department, joined by attorneys general from 11 states, filed an antitrust lawsuit against Google alleging it used its market power to thwart competition in search and advertising. There is also legislation in Congress, filed in 2021, that seeks to break up the big tech four of Amazon, Apple, Google and Facebook, claiming they exercise monopolistic power.

Also last year, President Joseph Biden issued an executive order seeking to limit the power of big tech companies, including extra scrutiny of mergers and acquisitions to check their tendency toward monopolistic power.