Alphabet Inc’s (NASDAQ: GOOGL) Google To Spin Off Ad Auction Division To Avoid Legal Proceeding From Authorities

Alphabet Inc (NASDAQ: GOOGL) Google has announced that it is ready to spinoff off the ad auctions division, which allows the company to purchase ad space on the web and in search results, into an independent company to help avoid antitrust actions as per a Wall Street Journal report. This offer is among the multiple concessions the search engine giant has made to the US Department of Justice. It seeks to avoid more lawsuits alleging anti-competitive practices.

Google to turn ad auction unit into an independent business 

The change would constitute a corporate shift, according to the Wall Street Journal. The proposal would turn its advertising business into an independent Alphabet firm rather than splitting off portions of it into a wholly different enterprise or spinning it off entirely. The holding firm for Google’s businesses, including Google, Waymo, and DeepMind, is called Alphabet. Therefore, even though Google might no longer be in charge of the ad auctions, the same individuals would ultimately bear responsibility. The change may affect “tens of billions of dollars” in operations, as per the WSJ.

Regulators have previously become interested in Google’s size and dominance in the application and web ad sectors. The corporation was accused of illegally preserving monopolies in the sectors for regular search services, search ads, and standard search text ads, according to antitrust accusations brought by the US authorities against it in 2020. Additionally, the UK’s Competition and Markets Authority recently announced that it would be looking into Google’s ad exchanges and marketplaces as part of its inquiry into the company’s advertising practices.

Google seeks to prevent more legal proceedings by spinning off the unit 

Google probably wishes to prevent any additional legal proceedings and enforcement measures because they might compel it to make adjustments that are far more significant than the ones it is already offering. According to The Wall Street Journal, the Department of Justice may file a new case in the coming few months if it is unable to reach a settlement with the company.

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Published by Neha Gupta

Swati has worked in diverse capacities from financial research to currency trading in a span of 3 years.