Alphabet’s Google is facing an investigation over potential antitrust violations by 50 of the nation’s state attorneys general led by Texas, CNBC reported.
Critics allege Google bundles its ad tools in a way that rivals can’t match, and its combination of search results, YouTube, Gmail, and other services are killing competition.
The AGs, and separately the US Department of Justice (DOJ), have been investigating Google’s business practices. They are considering a lawsuit against the 22-year-old Menlo Park, California, global technology giant. If successful, it would break up Google’s ad technology business, sources told CNBC.
It’s possible the AGs could lobby for alternatives for its ad technology business, such as imposing restrictions on how it runs its business, CNBC reported. But a suit may also include both options.
Some lawyers said breaking up Google’s ad technology business could be tough because it’s not a stand-alone unit.
“Courts are very concerned that by ripping a company apart, it hurts consumers and make[s] it worse for people that don’t have the expertise to do that,” Stephen Houck, one of the government lawyers in the Microsoft antitrust case two decades ago and now a Google advisor, told CNBC.
Still, big technology companies are under scrutiny. President Donald Trump signed an executive order to crack down on the liability protections for internet companies like Google. Presumptive Democratic presidential nominee Joe Biden has vowed, if elected, he would establish a new department within the Justice Department to reexamine mergers and those under consideration.
Google has defended itself. In a blog post last year, it argued the ad technology industry is a crowded one with competitors including Telaria, Rubicon Project, and The Trade Desk, CNBC reported.
A Google spokesperson told CNBC the company continues discussions with the ongoing investigations led by the Department of Justice and Texas Attorney General Ken Paxton, and it doesn’t have any updates or comments on speculation.
“The facts are clear,” she said. “Our digital advertising products compete across a crowded industry with hundreds of rivals and technologies, and have helped lower costs for advertisers and consumers.”
A spokesperson for Paxton, who is leading the ad tech part of the probe, declined to comment to CNBC, and a spokesperson for the DOJ did not respond to a CNBC request for comment.
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