Google To Split Ads Business, In Bid To Avoid Anti-Trust Charges: Reports
Alphabet's Google is reportedly planning to split its ad business between it and its parent company, in an attempt to avoid US anti-trust lawsuits.The separated entity could be valued at tens of billions of dollars, according to reports.
Some reports claim that Google has offered to split parts of its business that auction and place ads on websites and apps into a separate company under the Alphabet umbrella. While placing digital advertisements, the search giant, Google has been playing the role of a broker and an auctioneer, which experts and regulators argue, could be anti-competitive.
The United States Justice Department has been on a long-running investigation into allegations that Google abuses its double-sided role on digital advertisements bidding to steer itself business at the expense of rivals. The search-engine giant is also facing heat from the United Kingdom's Competition and Markets Authority, that recently ordered a probe into Google’s ad practices.
Google also faces another ad-tech investigation in the European Union, concerning it's video sharing platform, YouTube. In this case, the company has offered to settle the issue by allowing third-pary brokers to sell advertisements directly on the platform, according to a report by Rueters.
The US government's filing on anti-trust charges against Google dates back to 2020 and accuses the company of “unlawfully maintaining monopolies in the markets for general search services, search advertising, and general search text advertising.”
Google's offer of concenssions, is being seen by experts as the company conceding to increasing global pressure on anti-trust related issues.
According to eMarketer, digital ad-spending is touted to reach USD 60 billion, this year. The suggested split and restructure could have a major impact on the overall digital advertising landsapce, where Google plays the role of an unavoidable intermediary due to it's sheer size, magnitude, and reach. Last year, Google’s business of brokering ad sales on third-party websites and apps fetched the company a revenue of USD 31.7 billion, which amounts to roughly 12 percent of Alphabet’s total revenue generated.
