Google Attempts To Avoid Lawsuit

Published on 04 Jul 2022

Google, Lawsuit

As per a report by The Wall Street Journal, Google has apparently offered to spin off its ad auctions business into a slightly more separate company if doing so will help the company avoid antitrust actions. This business allows companies to buy online advertising time and search results. Reportedly, this is one of a number of concessions that Google has proposed to the United States Department of Justice in an effort to prevent more litigation claiming anti-competitive conduct.

The Impact of The Proposal

The Wall Street Journal states that the move would be considered a corporate shuffle. According to the idea, rather than severing pieces of its advertising business and creating a whole new firm out of them or selling them entirely, Alphabet would transform them into its own distinct company. Alphabet is the holding corporation for all of Google's subsidiaries and affiliates, including Google itself, Waymo, and DeepMind. (The Google corporation is thought of as having a number of subsidiaries, including things like YouTube and Pixel, as well as AdSense, of course.) In light of this, it is possible that Google will no longer be in charge of the ad auctions; yet, the buck will still ultimately stop with the same individuals. The Wall Street Journal said that the adjustment might affect "tens of billions of dollars" in commerce.

The dominance and size of Google inside the app and online advertising industries have previously attracted the attention of regulatory bodies. In the year 2020, antitrust charges were brought against the corporation by the United States government on the grounds that it "illegally maintained monopolies in the markets for standard search services, search ads, as well as general search text advertising." The United Kingdom's Competition and Marketplaces Authority has now announced that it will also be conducting an inquiry into Google's advertising practices. The authority said it intends to examine the ad exchanges and markets in which the firm operates.

Is The Proposal Enough?

Google most certainly wants to prevent any future legal challenges and enforcement measures since they might end up compelling the company to make changes that are far more significant than those it is now proposing. According to a recent article published in The Wall Street Journal, the Department of Justice may file a fresh lawsuit against the corporation over the next several months if it is unable to reach any form of compromise or arrangement with the business.


Featured image: Google


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