Digest: US Seeks to Break Up Google’s Online Ad Business; Temu Abandons Chinese Imports Model to Avoid Tariffs

In today’s Digest, we cover Walmart’s decision to drop plans to white-label its ad tech stack, Temu’s pivot away from Chinese imports to avoid US tariffs, and Google’s expansion of AI Mode in Search.

US Seeks to Break Up Google’s Online Ad Business

The US Department of Justice has announced that it seeks to force Alphabet, Google’s parent company, to sell key elements of its digital advertising operations, citing an illegal monopoly.

In court on Friday, the DOJ argued that separating Google’s ad exchange and publisher ad server units is essential to restoring competition. These platforms serve as the backbone of Google’s ad dominance facilitating both the auctioning of online ad space and enabling publishers to sell ad inventory.

In a Virginia court, the department also proposed that Google be required to share real-time ad bidding data with competitors. A trial date has been set for 22nd September by US District Judge Leonie Brinkema to consider the proposals and Google’s response.

Walmart Drops Plan to Sell Ad Tech Stack to Retailers

Walmart has officially abandoned its plans to offer a white-labeled version of its ad tech stack to other retailers, following an earlier pitch to partners in Europe, according to AdWeek. The product, developed under Walmart Commerce Technologies, was positioned as a solution to help retailers build and scale their own retail media networks using Walmart’s ecommerce infrastructure.

While Walmart did not elaborate on the decision, the move suggests a strategic shift away from exporting its ad tech capabilities.

Temu Abandons Chinese Imports Model to Avoid Tariffs

Temu is overhauling its US business strategy, dropping its reliance on cheap Chinese imports in favour of a ‘local fulfilment’ model, in a bid to avoid steep tariffs introduced under President Trump’s trade policies. In a statement, Temu said it will now source exclusively from local merchants for the US market and is actively recruiting local sellers to populate its marketplace. The shift is designed to bypass rising import taxes and maintain competitive pricing for American consumers, despite the regulatory headwinds.

Google expands AI Mode in Search

Google is broadening access to its conversational AI interface in Search, as it looks to capitalise on the growing consumer shift toward chat based discovery tools. The new feature, called AI Mode, allows users to engage with Search through a more conversational experience, resembling a dialogue with a knowledgeable assistant. The interface provides dynamic responses and follow up prompts, making search more interactive. Google started testing AI mode in March, and access is now being expanded to all Google Labs users within the US.