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Google reportedly offers to reshuffle advertising business to avoid Justice Department lawsuit

Google reportedly offers to reshuffle advertising business to avoid Justice Department lawsuit

Google has reportedly offered to shut down its ad auction business, which allows companies to buy ad space on the Web and in search results, if it can avoid antitrust actions, the Wall Street Journal reports. . will help. The proposal is reportedly part of several concessions that Google has made to the US Justice Department, as it accuses it of anti-competitive practices, to avoid further lawsuits.

According to the WSJ, the move would be a corporate reshuffle. Instead of turning parts of their advertising business into an entirely separate company or selling them out entirely, the proposal would make them a separate Alphabet company. Alphabet is the holding company for Google's assets such as Google, Waymo and DeepMind. (YouTube, Pixel, and, of course, AdSense are treated as subsidiaries of the Google entity.) So the ad auction can no longer be run by Google, yet the buck will eventually stop at those same people. According to the WSJ, this change could move "tens of billions of dollars" into the business.

Google's dominance and scale in the app and web advertising industry has previously caught the attention of regulators. In 2020, the US government filed antitrust charges against the company, saying it "illegally maintains a monopoly in the markets for general search services, search advertising, and general search text advertising." The UK Competition and Markets Authority also recently launched an investigation into Google's advertising practices, saying it aimed to look into the company's ad exchanges and markets.

Google potentially wants to avoid further lawsuits and enforcement actions, which could force it to make far bigger changes than it was offered. The Wall Street Journal reports that a new lawsuit from the Justice Department could come in the next few months if it doesn't reach some sort of settlement with the company.

Reached for comment, Google spokesman Peter Schottenfels sent The Verge the same statement that was provided to the Wall Street Journal:

We are working constructively to address the concerns of regulators. As we've said before, we have no plans to sell or exit this business, and we are committed to providing value to a wide range of publisher and advertiser partners in a highly competitive field. Tough competition in advertising technology has made online advertising a more relevant, lower fee and expanded option for publishers and advertisers.

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