GOOGL: Google Threatened With Ad Business Breakup By EU Regulator
- Google could be forced to sell parts of its ad business if EU antitrust concerns are not adequately addressed.
- Alphabet makes the vast majority of its revenue from its ad business, so a forced split would harm its revenue for the foreseeable future.
- Google is also being investigated for antitrust practises in both the US and the UK.
Alphabet’s Google faces a challenge by the EU competition commission this week, after it was accused of anti competitive practices in the ad sector. The charge sheet has alleged that the company had abused its dominance in the market to charge higher fees, and make it difficult for competition to acquire business. If the commission concerns are not adequately addressed, the regulator has threatened to force Google to sell certain components of its high-revenue ad unit.
Forced divestment is usually reserved for serious breaches of antitrust laws, where even fines in the billions of dollars have little material impact on a company’s operations. Online ads generated a whopping 80% of Alphabet’s total revenue last year. As such, a forced splitting of parts of the business would be sure to hurt.
The tech-giant is continuing to insist that it has done nothing wrong, but its ad business has been under probing by EU regulators for more than 2 years. It’s also not just the EU regulator investigating whether Google has committed antitrust offenses, as the both the US and the UK have launched their own investigations into those regionalized arms.
(About Google)
Google is a multinational technology company that specializes in internet-related services and products. Founded in 1998 by Larry Page and Sergey Brin while they were Ph.D. students at Stanford University, Google has grown to become one of the most influential and valuable companies in the world. Google has also recently made advancements in the field of artificial intelligence (AI) and machine learning. The company's AI-powered virtual assistant, Google Assistant, can perform a wide range of tasks and provide information in a conversational manner. Google has also developed AI technologies for image recognition, language translation, and natural language processing, among other applications.