DOJ Mulls Breaking Up Google After Landmark Antitrust Ruling

In the wake of a recent U.S. court ruling that Google violated antitrust laws, the Department of Justice (DOJ) is reportedly considering the option of breaking up the tech giant.
The disintegration of Google could mark a pivotal moment, as it would be the first significant corporate split propelled by antitrust enforcement since the unsuccessful attempt to break up Microsoft two decades ago.
As alternatives, the DOJ is also contemplating forcing Google to share data with competitors and implementing measures to ensure it does not gain an unfair advantage in the AI products space.
Sources have indicated that the most likely units to be separated would be the Android operating system and the Chrome browser. The DOJ is frequently discussing the potential separation of Android. There is also consideration being given to compelling Google to sell its advertising platform, AdWords.
Following this revelation, Google’s stock, which had ended the day up, fell by over 1.5% in after-hours trading, though losses later narrowed to 0.8%.
Last week, a U.S. court declared that Google had illegally monopolized the online search and search advertising markets, a landmark ruling for U.S. authorities challenging the dominance of large tech companies. Google has announced its intention to appeal.
Federal District Judge Amit Mehta highlighted that Google paid $26.3 billion in 2021 alone to ensure its search engine remained the default on smartphones and browsers, thus maintaining its market dominance.
The DOJ argued that Google’s monopoly significantly impacted the search engine market landscape, unfairly harming competitors. Before Google’s dominance, numerous startups were attempting to challenge it with better products but could not afford the high marketing costs to compete.
Judge Mehta noted that Google required device manufacturers to sign agreements to access its applications, which mandated the installation of Google’s search widget and Chrome browser on devices, blocking other search engines from competing.
This decision follows a December ruling by a California jury that found Google to have monopolized the Android app distribution market.
Judge Mehta also pointed out that Google monopolized search ads sold via its Google Ads platform, previously named AdWords.
If the DOJ does not push for the sale of AdWords, it might require interoperability regulations to ensure AdWords works seamlessly with other search engines. Another option being considered is to make Google license or share its data with competitors like Microsoft’s Bing or DuckDuckGo.
Concerns have been raised during discussions with companies affected by Google’s actions that its dominance in search provides it with an edge in AI technology development. The U.S. government may seek to prevent Google from using its content in certain AI products.
For more than two decades, Google’s search engine has been the main gateway to the global internet landscape. While there have been challengers like Lycos, AltaVista, Yahoo, and Bing, Google’s effective monopoly has rarely been under threat.
In the mobile internet era, Google’s control over the Android system solidified its dominance over mobile terminals.
Google is still fighting back. In response to the ruling, it announced plans to appeal, arguing that while the court acknowledged it provides the best search engine, the conclusion sought to inhibit its rightful success.
Despite this, concerns from the capital market haven’t eased. Although Alphabet shares closed up 1.21% following the announcement of the Pixel 9 series, the split news caused the stock to dip by 1.49% in after-hours trading.
Previous landmark break-ups include the 1984 DOJ-initiated disbandment of AT&T into several smaller companies, a precedent that adds weight to the DOJ’s current considerations.
Though Google is the current focus, other tech giants like Apple, Amazon, and Meta are also facing antitrust litigation.
Final outcomes from these antitrust considerations remain uncertain and will likely require extensive judicial processes, potential appeals, and negotiations. The forthcoming hearing scheduled for September 6 will begin to determine the next steps, but patience is necessary as the legal proceedings unfold.