The DOJ is weighing the break up of Google after winning an antitrust decision
Background of the Antitrust Case
Having recently won an antitrust case, the U.S. Department of Justice (DOJ) is believed to be considering having a federal judge break Google’s online search monopoly. The change could be a major shakeup to Google’s longstanding business model.
Potential Divestment Plans
In the filing, DOJ listed possible steps to address its alleged “unlawful conduct” conducted by Google. These options include the break-up of specific Google services, like having to relinquish control over Chrome browser or the Google Play app store, or even selling off the Android OS. The DOJ stressed that any remedy for these concerns would require the break-up not only to reverse Google’s current wide-reaching distribution, but also prevent it from being as dominant in the future.
What it means for Google Business
Google’s parent company, Alphabet was down nearly 2% post-announcement The case was heard by Judge Amit Mehta who had said earlier that Google had created a monopoly through unfair means, such as very high payments to prevent competition. A ruling on the remedies is due next summer.
The DOJ has also floated the possibility that Google could be ordered to give up essential search data and algorithms with competitors in order to create a more level playing field. Finally, the advent of artificial intelligence has added new fears that it could reinforce Google’s market power, therefore requiring more modern remedies to be in place.
Industry Reactions
Reacting to the DOJ’s possible intentions, Google described the initiatives as “severe”, and mentioned innovation and client experience would endure. A spokeswoman for Google, Lee-Anne Mulholland, said the company was concerned the government actions at least could have “unintended economic consequences” for American companies and consumers.
By contrast, competing search engine DuckDuckGo welcomed the DOJ’s guidance as a positive move towards more rivalry in the space.
Wider Regulatory Actions
The action forms part of a series of regulatory actions against Google, which is battling several antitrust lawsuits across different parts of its business. A federal judge recently ordered Google to open its Play Store up to competitors and a new case regarding their digital advertising monopoly is also underway.
Conclusion: The Road Ahead
If regulators ever get serious about breaking up Google, it could be the most important restraining action taken by a federal government since it put AT&T into villages back before I published my first novel four decades ago. In the case of Google and anticompetitive behavior, the stakes are high and it remains to be seen what the DoJ will do next. Google’s CEO Sundar Pichai said the legal fights could drag on for years, and Google is expected to challenge DOJ claims in court.
The developing situation with Google could establish crucial precedent in future antitrust cases against the likes of Amazon, Apple, and Meta. An increasing progression in the legal standpoint will be closely monitored by consumers and businesses alike.