It is not the first monopoly lawsuit faced by Alphabet, the parent company of Google, neither in the United States nor in the European Union. However, this time, analysts agree that if the US government wins the antitrust lawsuit, the consequences would be much more serious for the company. In fact, according to 'The Wall Street Journal', the possible closure of Google's advertising business would reshape the online advertising sector and give advertisers more flexibility to exit the Google ecosystem without any risk to their businesses.

If the case is successful, advertising and media industry executives also believe an asset spin-off is more likely than a sale. In this case, they reiterate, "selling the assets could be challenging, because the big technology and media companies that could afford such a deal could face their own antitrust hurdles," so "a spin-off would be more likely."

The US Department of Justice, led by Attorney General Merrick Garland, along with eight states, has accused Google of illegally gaining dominance in the global digital advertising market and, ultimately, having broken competition in the sector. The lawsuit is directed at the base of his business (around 80% of his income comes from online advertising) and one of the plaintiffs' claims is that he get rid of his Google Ad Manager ad management platform, which includes its ad server, the DoubleClick suite of tools, and the AdX ad trading platform.

“Competition in the ad tech space is broken, for reasons that have not been accidental or inevitable. An industry behemoth, Google, has corrupted legitimate competition in the ad-tech industry, engaging in a systematic campaign to seize control of a wide range of high-tech tools used by publishers, advertisers and brokers to facilitate digital advertising. ”, the letter alleges.

Google has not been slow to respond to the DOJ and has done so through an article on its blog where it has denied wrongdoing: "The DOJ demands that we undo two acquisitions that were reviewed by US regulators 12 years ago (AdMeld) and 15 years ago (DoubleClick). By trying to reverse these two acquisitions, the DOJ is attempting to rewrite history at the expense of publishers, advertisers, and Internet users. Both acquisitions allowed us to invest heavily in the development of new and innovative advertising technologies. These deals were checked by regulators, including the Department of Justice, and allowed to proceed. Since then, competition in this sector has only increased.”

In this sense, in statements to the WSJ, Rajeev Goel, co-founder and CEO of PubMatic, points out that this antitrust case, along with other legal battles the company is facing, "is pushing potential customers to explore alternatives to Google."

Google's ad server is used by 90% of big publishers, while its ad exchange has a market share of more than 50%, according to the government's lawsuit. In recent years, Google has merged these tools into a single product called Google Ad Manager, which, together with its mobile and network advertising businesses, posted $31.7 billion in revenue in 2021.

This is the second time that the US Department of Justice has filed charges against the technology company. In 2020, the agency launched legal proceedings against Google for exercising monopolistic practices to maintain its dominance in the Internet search sector, as well as in the advertising that accompanies these searches.

Dismissal of 12,000 workers worldwide
Alphabet also announced last week the layoff of 12,000 workers worldwide, equivalent to 6% of its workforce. This is the largest staff cut in the entire history of the company. Sundar Pichai, CEO of Alphabet, announced this measure in a letter sent to all employees, in which he explained that "with this job cut, the company seeks to respond to the weakening of global economic conditions."

“In the last two years we have experienced periods of spectacular growth. To match and feed that growth, we hire for an economic reality that is different from the current one," claimed Pichai, who apologized to the workers: "I take full responsibility for the decisions that have led us here." Google has already informed the laid off US employees of its decision. In the rest of the world, the company has assured that "the process will take a little longer due to local laws and practices."

Taken from: https://ecommerce-news.es/el-posible-cierre-del-negocio-publicitario-de-google-remodelaria-el-sector/