Google Faces DOJ Demand to Sell AdX Amid Antitrust Battle

Google's proposal to address antitrust concerns by divesting certain advertising technology businesses has been rejected by the Department of Justice. The tech giant's external counsel revealed that the Department of Justice is seeking a more stringent measure: the forced sale of the advertising exchange platform, AdX. This development follows a judge's ruling that Google had illegally monopolized two advertising technology markets. The Department of Justice and Google are set to begin a two-week hearing next week to discuss whether the company must divest certain businesses.

Google had previously considered separating its website and app advertising auction business into an independent company, while still retaining it within the Alphabet structure. However, the Department of Justice's demand for a complete technological separation and divestment of AdX is fundamentally different from Google's proposed settlement. The judge overseeing the case, Leonie Brinkema, has allowed the Department of Justice to disclose limited information about Google's internal assessments of the feasibility of technological separation. "Technological feasibility is key to this case," Brinkema emphasized.

Competition management agencies in the United States and Europe have both concluded that Google has illegally dominated the advertising technology market by giving its advertising tools an unfair advantage. Earlier this month, the European Union fined Google 30 billion euros for unfair business practices, marking the second-highest penalty imposed by the Brussels regulatory body on the company. Concurrently, the United States is seeking a court order from Judge Brinkema to compel Google to immediately sell the AdX exchange platform and ensure its technology is interoperable with competitors.

This legal battle underscores the intensifying scrutiny that Google faces from regulatory bodies on both sides of the Atlantic. The Department of Justice's insistence on a complete technological separation and divestment of AdX suggests a determination to break Google's dominance in the advertising technology sector. The upcoming hearing will be crucial in determining the future of Google's advertising businesses and the broader implications for the tech industry.

Google's external counsel has emphasized that the company's proposal to separate certain advertising technology businesses is significantly different from the Department of Justice's demands. The tech giant currently operates a range of advertising services, including those for marketers, publishers, and the AdX exchange platform. The Department of Justice's push for a complete technological separation and divestment of AdX indicates a more aggressive approach to addressing antitrust concerns.

The judge's decision to allow limited disclosure of Google's internal assessments of technological separation highlights the importance of this aspect in the case. The feasibility of separating AdX from Google's broader advertising ecosystem will be a critical factor in the upcoming hearing. The outcome of this legal battle could set a precedent for how regulatory bodies address monopolistic practices in the tech industry, particularly in the advertising technology sector.

The European Union's recent fine against Google for unfair business practices further underscores the global scrutiny that the tech giant faces. The 30 billion euros penalty is a significant blow to Google and reflects the growing concern among regulatory bodies about the company's market dominance. The United States' push for a court order to compel Google to sell AdX and ensure interoperability with competitors indicates a similar determination to address antitrust issues.

As the legal battle between Google and the Department of Justice unfolds, the tech industry will be closely watching the developments. The outcome of the upcoming hearing could have far-reaching implications for Google's advertising businesses and the broader tech landscape. The Department of Justice's insistence on a complete technological separation and divestment of AdX suggests a willingness to take aggressive measures to address antitrust concerns, setting a precedent for future regulatory actions in the industry.