Google offered to sell off AdX, its ad exchange, in an effort to head off the EU’s antitrust investigation into its ad tech business, according to a report from Reuters citing multiple sources familiar with the matter. But the move never materialised in part because European publishers believed it wouldn’t be sufficient to balance the market, despite AdX’s central role in Google’s ad tech stack.
Reuters said the offer was made earlier this year, meaning it came after the European Commission’s initial statement of objections against Google’s ad tech business. In its preliminary ruling, the Commission said it believed that forced divestment of some of Google’s business would be necessary in order to properly restore competition in the ad tech market (though this decision wasn’t final).
Google’s offer was therefore likely made as an effort to avoid a larger scale divestment. Publishers consulted on the issue weren’t satisfied, saying they wanted to see more of Google’s ad tech stack spun off.
As it happens, reports from earlier this week suggest the EU is now minded not to force a divestiture at all. The Commission reportedly believes that breaking up Google’s ad tech business would be very complicated, and is instead likely to rule that Google must end specific anticompetitive practices. Failure to comply with this ruling could result in a forced break up further down the line.
Untangling the web
The news gives interesting insight into Google’s attitude towards a break up, just as the US Department of Justice tries to force the issue via its ongoing antitrust case against the tech giant. The DoJ has asked for AdX and its publisher ad server DFP to be spun off from Google.
Judging the value of each piece of tech is inherently tricky. The DoJ’s case against Google rests on how Google has leveraged its alleged dominance in parts of its advertising business to build advantages in separate parts. AdX benefits from DPF’s privileged access to publisher data and bid from rival exchanges, DPF benefits from access to exclusive demand from Google’s buy-side tools, and this demand is funnelled through AdX, where win-rates are high due to AdX’s advantages over its rivals.
In Google’s eyes, AdX is presumably the most expendable piece of this puzzle (since it was the part of the stack it was most willing to offer up).
