Tech

Google has found a way to escape a record fine, here’s how

To avoid possible lawsuits for abuse of dominant position, Google would have decided to make some concessions. According to the Wall Street Journal, the firm would be ready to separate some of its advertising technology activities in a new company.

Credits: Google

For many years now, Google has been in the crosshairs of American and European justice for acts of abuse of a dominant position. The firm is regularly accused of taking advantage of its monopoly to favor its advertising platform, allowing it to charge fees to both publishers and advertisers.

In any case, this is what the British Competition Authority asserted in its investigation opened against Google in May 2022. In the United States, lawsuits against Google have multiplied over the yearsand according to our colleagues from the Wall Street Journal, the company would have found a solution to calm things down and avoid a possible lawsuit for abuse of dominant position for the American justice.

Indeed, the company reportedly proposed to split parts of its advertising technology business and assign them to a new company (which would remain under the aegis of the parent company Alphabet of course). Through this internal reorganization, Google hopes to put an end to the concerns of the American authorities on possible abuse of a dominant position in the online advertising market.

Also read: Google finally fined 2.4 billion euros, European justice has ruled

Google thinks it has found a way to avoid an antitrust lawsuit

Only and always according to the Wall Street Journal, this idea does not really thrill the American Department of Justice, which prefers by far that Google sells its parts to other third-party companies that are not owned by Alphabet. Nevertheless, it is difficult to see the firm proceed in this way. At the end of 2021, the company reported an increase in advertising revenue of around 41% compared to the 3rd quarter of 2020.

These supposed concessions from Google come months after several US senators proposed introducing new legislation directly targeting Google’s ad-tech platform. Regulators fear that the Californian giant does not promote its own activities to the detriment of its rivals. This bill was supposed to prohibit Google and other GAFAMs from control several parts of the online advertising supply chain.

As a reminder, it is not only in the online advertising market that Google’s activities are singled out. In July 2021, 36 US states sued Google for its dominance of the Play Store. Dozens of attorneys general have accused the company of illegally controlling the distribution of apps on Android and to pay developers to encourage them not to publish their apps on stores other than the Play Store.

Source : wall street journal

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