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States lean toward pushing to break up Google’s ad tech business


Visitors pass by the logo of Google at the high profile startups and high tech leaders gathering, Viva Tech, in Paris, France May 16, 2019.

Charles Platiau | Reuters

The state attorneys general investigating Google for potential antitrust violations are leaning toward pushing for a breakup of its ad technology business as part of an expected suit, people familiar with the situation told CNBC.

Fifty attorneys general have been probing Google’s business practices for months, alongside a similar probe being led by the U.S. Department of Justice. Both the states and the DOJ are looking to file a suit against the internet giant as soon as within the next few months, the people told CNBC.  

The states and the Justice Department have not yet officially decided whether to combine their expected suits, the people said, though they have been collaborating closely. Both have been investigating Google’s search, ad technology and android business

The attorneys general investigating Google, which is owned by Alphabet, haven’t yet definitively ruled out pushing for alternatives for its ad technology business, like imposing restrictions on how it runs its business, one of the sources said. A suit may also include a push for both that option and breaking up the ad tech business. 

Should the attorneys general aggressively pursue a break up of Google’s ad technology business, it would be notable. While regulatory enforcement agencies have recently favored “structural remedies” − breakups and divestitures − regulators have less onerous solutions available, like barring certain behaviors through a consent decree.

Once the attorneys general file their expected lawsuit, they have a number of tools at their disposal to signal their intent to push for a breakup of Google’s ad technology business. That includes what they allege, the evidence they introduce, pre-trial briefings and news conferences.  

In Google’s case, pushing for a breakup of its ad technology business may be difficult, some lawyers say, because it does not exist as a stand-alone unit easily hived off. And its two main deals, DoubleClick in 2007 and AdMob in 2009, were years ago. 

“Courts are very concerned that by ripping a company apart, it hurts consumers and make it worse for people that don’t have the expertise to do that,” said Stephen Houck, one of the government lawyers in the Microsoft antitrust case two decades ago. Houck is now an adviser to Google. 

While Google generates the majority of its roughly $161 billion in revenue from ad sales, the revenue it gets from the software and technology that serve as the backbone of that business is far smaller. Its Network Members business, which includes AdMob, AdSense and Google Ad Manager, generated about $22 billion in sales the last fiscal year. 

Google retired the DoubleClick name in 2018, putting its DoubleClick products for advertisers together with Google Analytics 360 to become the “Google Marketing Platform.” Then it put its…



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2020-06-06 00:52:45

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