Recent legal documents reveal that the U.S. Department of Justice is contemplating the potential breakup of Google to address its "illegal monopoly" in the search sector. This consideration comes on the heels of a federal court ruling in August that found Google's dominance in online search violates antitrust laws.
The proposal includes forcing Google to divest parts of its business, potentially altering its use of the Chrome browser, Play Store, and Android operating system, which have given it a substantial advantage over competitors through default agreements. This marks the first antitrust-driven breakup consideration of a tech giant since Microsoft.
Google criticized the proposal, arguing that its search leadership results from superior service quality. The company plans to appeal the ruling, emphasizing existing competition from rivals like Amazon. Some smaller competitors, such as Yelp, advocate for stricter measures, including separating Chrome and AI services.
If enacted, this could be the largest corporate breakup in the U.S. in four decades. However, experts like Cornell University law professor Erik Hovenkamp highlight the operational challenges, noting that judicial figures often view such measures as extreme, with unpredictable ramifications.
With the upcoming detailed justice proposal expected by November, and Google’s response following in December, an extensive legal battle looms. Analysts note the potential negative impact on Google's market share and valuation if the breakup proceeds, although current market sentiment shows room for growth.