United States attorneys general want to break Google Adsense from Google and Alphabet
The authorities in the United States want to separate Google Adsense from Google and Alphabet. Google has been under investigation for potential anti-trust violations since last year. One of the possible and workable solution the AGs are looking at is breaking Adsense into a separate company.
As many as 50 attorneys general have been probing into Google anti-trust violations. And most of them are leaning towards a breakup of Google’s ad technology business as part of a settlement. It may be noted that Google is under investigation from the U.S. Department of Justice as well for the same violations. 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.
Google generates the majority of its roughly $161 billion in revenue from ad sales from products like Adsense, AdMob, and Google Ad Manager. The revenue from Google’s non-ad services is minuscule compared to the ad business. The attorneys general investigating Google, which is owned by Alphabet, think that the best option to avoid a protracted court battle is breaking up the ad tech business.
However, breaking up Google won’t be easy. For one, Google will fight tooth and nail to any such proposal. Secondly, Google’s main revenue is Adsense, and breaking it would mean Google is left with no worthwhile revenue model.
“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.
U.S. authorities have been successful in breaking up monopolies like Standard Oil in 1911 and AT&T in the 1980s but nowadays it is more difficult. The anti-trust suits mostly end up in stiff penalties. A similar move to break up IBM in the 1980s and Microsoft in 2000 concluded in fines without breaking up the respective companies.