Google offers EU ad tech separation plan to head off potential divestiture order, people familiar say

Google has sent the European Commission a commitments package that includes a legal separation of parts of its ad tech stack within the European Economic Area, according to people familiar with the matter. The proposal, delivered Wednesday in Brussels, aims to resolve the Commission’s 2023 abuse of dominance case and avoid a formal order to divest assets or a fine that could reach up to 10 percent of global turnover.

The move matters because Alphabet generated 237.9 billion dollars in advertising revenue in 2023, according to its annual report, and EMEA contributes roughly one third of company revenue. The Commission signaled in 2023 that behavioral fixes might be insufficient, which put structural remedies on the table.

Proposed EU remedy

People familiar with the draft said options under discussion include placing Google Ad Manager’s publisher ad server and the AdX exchange into a ring fenced European subsidiary with independent governance, data separation, and open access obligations. The plan would commit to non discriminatory interoperability with rival demand side and supply side platforms, with a trustee to monitor compliance for a multiyear period.

Neither Google nor the Commission disclosed details of the proposal. A spokesperson for the Commission said it does not comment on ongoing cases, and Google declined to comment.

Regulatory context

The Commission issued a Statement of Objections in June 2023 that alleged conflicts of interest across Google’s ad tech supply chain and said a divestiture of parts of the business might be the only effective remedy. The case cites Google’s strong positions in publisher ad serving and ad exchanges, including over 90 percent share in publisher ad servers in the UK as found by the Competition and Markets Authority in its 2020 market study.

Alphabet has already paid 8.25 billion euros in EU antitrust fines across three earlier cases covering Shopping, Android, and AdSense, and is a designated gatekeeper under the Digital Markets Act. In March 2024 the Commission opened noncompliance investigations into several gatekeepers, including Google, for alleged self preferencing and steering restrictions.

Any commitments would be market tested with third parties before adoption, a standard Commission process that can take weeks. Structural measures in Europe would add pressure in the United States, where the Department of Justice’s 2023 ad tech lawsuit seeks the divestiture of the Ad Manager suite and a trial schedule continues to advance in federal court.

For the broader technology sector, a European blueprint that separates ad tech functions inside one company would signal regulators’ increased willingness to push structural remedies in digital markets, raising compliance costs and potentially reshaping how large platforms design integrated services across regions.