Alphabet Inc’s GOOGL GOOG Google is battling an antitrust trial to prevent a forced sale of a segment of its online advertising business.
DOJ, States Push Google To Sell AdX, Open Auctions
The trial, which commenced on Monday in Alexandria, Virginia, is the U.S. government’s latest attempt to curb Google’s monopoly power, as per a Reuters report. This comes after the government’s unsuccessful bid earlier this month to compel Google to sell its Chrome browser.
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The U.S. Department of Justice, along with a coalition of states, is seeking to force Google to divest its AdX ad exchange, where the company charges publishers a 20% fee for ads sold in real-time auctions. They also want Google to make the auction system that determines winning bids open source, in an effort to reduce its control over digital advertising.
“Leaving Google with the motive and the means to recreate that tie is simply too great a risk,” stated DoJ
Google’s attorney, Karen Dunn, argued against the DOJ’s proposals, calling them “radical and reckless.” She stated that these proposals would damage competition by removing Google from the market. Google has asked Judge Brinkema to adopt a cautious approach similar to a judge in a separate case over Google’s online search monopoly.
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Antitrust Trial May Reshape Google’s Ad Business
The outcome of this trial could have significant implications for Google’s advertising business, which is a major revenue driver for the tech giant. This development follows a favorable ruling for Google in an antitrust case against Apple, where a U.S. judge dismissed the iPhone maker’s claims.
Meanwhile, analysts have suggested that Google should focus on its search business over its AI initiatives, as search advertising continues to be the company’s primary revenue source, with over a 90% share of Search advertising. The ongoing antitrust trial could potentially impact Google’s future business strategies and market dominance.
Benzinga’s Edge Rankings place Google in the 87th percentile for quality and the 87th percentile for momentum, reflecting its strong performance in both areas. Check the detailed report here.
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