The cloud of a forced breakup seems to have drifted over Google.
According to media reports citing informed sources, the U.S. Department of Justice is considering a rare move - breaking up Google. If implemented, this would be the first attempt to break up an illegal monopoly since the U.S. government failed to break up Microsoft twenty years ago. It would also be the biggest breakup faced by a U.S. company since the breakup of AT&T in the 1980s.
The DOJ Won The Antitrust Case
Last week, Google's parent company, Alphabet, ruled that its dominant position in the search market violated antitrust laws. This means that in the biggest antitrust case in the U.S. technology industry in more than twenty years, the DOJ won.
In December last year, a jury in California also ruled that Google had monopolized the distribution of Android applications.
Although Alphabet has stated that it will appeal the ruling, this legal process may take about two years. Mehta has asked both parties to start preparing for the second phase of the trial on September 4th. This trial will determine how to break Google's monopoly, and the U.S. Department of Justice will propose a plan to restore market competition, which includes a potential plan to split Google.
Breakup Plan
If the Department of Justice proceeds with the breakup plan, then the Android operating system and the Chrome browser would be the most likely business divisions to be separated. Both products have a large number of users, and the Android operating system is widely used on about 2.5 billion devices.
The Judge who made the decision last week pointed out that Google's attempt to require device manufacturers to sign agreements to preinstall its Gmail, Google Play Store, and other applications in an undeletable manner effectively prevents competition from other search engines.
Besides Android and Chrome, officials are also considering forcing the sale of Google's AdWords platform, which is used for selling search advertisements.
In addition, the judge also believed that Google monopolized the advertisements that appear at the top of the search results page, and these advertisements are being sold through AdWords. This move would have a significant impact on Google's advertising business, as search advertisements account for about two-thirds of Google's total revenue.
Other Possible Measures
In addition to the breakup, the Department of Justice is also considering other less aggressive antitrust measures. These include requiring Google to share more data with competitors such as Microsoft Bing and DuckDuckGo. Doing so would help competitors improve search results and compete more effectively with Google.
This requirement is not unfounded. The recently enacted Digital Markets Act in Europe has also proposed similar requirements. In the previous antitrust case settlement against Microsoft, Microsoft was required to provide application programming interfaces (APIs) free of charge to third parties. Earlier, in the first lawsuit filed by the U.S. Department of Justice against AT&T in 1956, the company was required to provide free licensing of its patents.
At the same time, Google's advantages in the field of AI have also attracted DOJ's attention. Many websites have been allowing Google's web crawlers access to ensure that they appear in Google's search results. However, these data have recently been used to help Google train AI products, which has caused some websites to worry and be dissatisfied.
DOJ may seek to prevent Google from forcing websites to allow its content to be used for AI products in exchange for display in search results.
No matter what, the DOJ will likely demand to prohibit Google from reaching exclusive contracts with companies such as Apple regarding the default search engine, which is the core of Google's antitrust case.