Google already knows how to avoid monopoly lawsuits: by moving its advertising division to… Alphabet

In recent years, Google has faced lawsuits for abuse of dominant positionboth in Europe and in the United States. Some of them have resulted in millionaire sanctions, such as the fine of 2,420 million euros imposed by the European Commission in 2017.

Now the US Department of Justice, which has long investigated Google’s dominant role in the ad market, is preparing a new lawsuit that could be filed this summer. according to The Wall Street Journal.

In this sense, the Mountain View giant would have offered a “concession” to the authorities to avoid another legal battle. It would be about split your advertising business in two. One of the parts, the one under scrutiny, would be established under the Alphabet umbrella.

The role of Google in online advertising

The advertising platform is the true queen of Google, simply because it is the one that generates the most income, as we have in This is how you make money. This has tools that allow advertisers to bid on keywords and ads for the company’s services and applications, such as the search engine, YouTube, Maps, Gmail, among others.

In addition, any other web page can generate income by inserting the advertising modules managed by Google. That is, the giant of Mountain View not only auctions digital ads, but also fulfills the role of intermediarysomething that, according to the accusations investigated by US regulators, stifles the competition.

In this way, before the increasingly intense scrutiny and the possible threat of a new lawsuit, Google would separate from its advertising platform the part that is in charge of auctioning the keywords and ads for create a new division within Alphabetwhich could be valued in the tens of millions of dollars.

In the end, everything would continue to be under the orbit of the same parent company, but in different companies, so the sources consulted by the American newspaper are not sure that this movement will be able to convince the antitrust regulators, who would expect changes. deeper into the structure.

As we can see, the actions of Google do not contemplate leaving the advertising business, as a company spokesperson told the WSJ. “We have engaged constructively with regulators to address their concerns. As we have said before, we have no plans to sell or exit this business.”

For now, it remains to be seen if this strategy will take effect, but the reality is that Google has been the epicenter of many lawsuits. In October 2020, the US Department of Justice accused him of anti-competitive practices. Later, the British regulator opened an investigation into its advertising business model.

The European Commission’s competition watchdog had also launched an investigation last year to assess advertisers’ limitations in displaying ads on YouTube. According to Reutersthe “concession” that Google would have offered would be allow other companies to place ads on your video platform.

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