Sunday, December 04, 2022

Google offers to break up ad tech business to avoid antitrust lawsuit: Report

Google has reportedly offered the US government to break up its ad tech business, which allows companies to place ads across the internet and apps, into a separate entity under the Alphabet umbrella, to avoid an antitrust lawsuit.

According to the Wall Street Journal, the deal was part of multiple concessions the tech giant offered to the US Department of Justice to avoid lawsuits over anticompetitive practices.

The US Department of Justice is investigating allegations that “Google abuses its role as a digital ad broker and auctioneer to run its business at the expense of rivals,” and is preparing a lawsuit that could be announced soon.

In a 64-page complaint with 194 numbered articles, the US Department of Justice and 11 states sued Google in October 2020 for antitrust violations, alleging that it weaponized its dominance in online search and advertising to kill off competition and harm consumers.

The lawsuit marks the largest move by the US government since its case against Microsoft more than 20 years ago. This comes after 15 months of investigation and could be the opening scene for more antitrust action against other Big Tech companies.

Reacting to the WSJ report that was published on Friday, a Google spokesperson said that they have been engaging constructively with regulators to address their concerns.

“As we said before, we have no plans to sell or exit this business. Rigorous competition in ad tech has made online ads more relevant, lowered fees, and expanded choice for publishers and advertisers,” said the spokesperson for the company. in the report

Not just in the US, Google is also facing antitrust investigations in the UK and India.

The UK competition watchdog opened a second investigation into Google’s unfair practices in ad tech in May, following the launch of an investigation into Google and Meta’s ‘Jedi Blue’ deal.

The Competition and Markets Authority (CMA) is investigating whether Google has broken the law by restricting competition in the digital advertising technology market.

“We are concerned that Google may be using its position in ad technology to favor its own services to the detriment of its rivals, its customers and, ultimately, consumers,” said Andrea Coscelli, CEO of CMA.

The CMA is assessing whether Google’s ‘ad tech stack’ practices may distort competition.

In July 2021, the French regulator closed a similar case against Google by imposing a fine and securing commitments.

In March this year, the Competition Commission of India (CCI) ordered an investigation into complaints against Google for abusing its dominant position in relation to Google’s news reference services and ad technology services in the Indian market. of online news media.

The ICC concluded that prima facie these allegations of abuse of dominant position fall under the Competition Act 2002 and require a detailed investigation by the Additional Director General.



(Only the headline and image in this report may have been modified by Business Standard staff; all other content is auto-generated from a syndicated source.)

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