Antitrust "pressure mounts"! Alphabet Inc. Class C (GOOGL.US) proposes to sell part of its advertising business, but European publishers are not convinced.

Two informed sources said on Wednesday that Alphabet Inc. Class C, a subsidiary of Alphabet (GOOGL.US), has taken an important step this year to end the European Union's antitrust investigation by proposing to sell its AdX advertising exchange platform. However, European publishers rejected the proposal, deeming it insufficient. Last year, Alphabet Inc. Class C's profitable advertising technology business came under scrutiny by EU regulators after a complaint was lodged by the European Publishers Council. The European Commission subsequently accused Alphabet Inc. Class C of favoring its own advertising services, marking the fourth antitrust lawsuit filed against the company by the Commission. According to three lawyers involved in antitrust cases, Alphabet Inc. Class C has never before proposed selling assets in an antitrust case. Meanwhile, Alphabet Inc. Class C is facing trial in the United States. U.S. antitrust authorities are attempting to compel Alphabet Inc. Class C to sell its ad manager product, including AdX and the publisher ad server DFP. Sources said that publishers rejected Alphabet Inc. Class C's proposal because they wanted the company to divest not just AdX but to address the conflicts of interest arising from the company's near-complete penetration of various levels of the ad tech supply chain. They stated that EU antitrust enforcement authorities were aware of this proposal. An Alphabet Inc. Class C spokesperson stated, "As we've said before, the European Commission's allegations on our third-party display advertising products are based on a flawed understanding of the advertising tech industry, which is competitive and fast-paced. We remain committed to this business." It is reported that AdX is a platform where publishers can offer their unsold ad space in real-time for advertisers to purchase. EU Antitrust Commissioner Margrethe Vestager suggested last year that Alphabet Inc. Class C divest its seller tools DFP and AdX to end the conflicts of interest. However, other sources said that due to the complexity of the case, the European Commission is unlikely to force Alphabet Inc. Class C to divest assets at present, but may order it to cease anti-competitive behavior in the coming months. They stated that if Alphabet Inc. Class C does not comply with the EU's first decision that may be issued in the next few months, a divestiture order might follow. Alphabet Inc. Class C's advertising revenue in 2023 (including search services, Gmail, Google Play, Alphabet Inc. Class C Maps, YouTube, Alphabet Inc. Class C Ad Manager, AdMob, and AdSense) totaled $237.85 billion, accounting for 77% of total revenue. The company is a dominant global digital advertising platform.