DOJ Considers Possible Google Breakup

The DOJ is seeking remedies in the Google antitrust case, and is reportedly looking into asking the judge to break up Google.

At a Glance

The DOJ may ask a judge to break up Google to address its search engine market monopoly.
The DOJ’s proposals include structural changes to Google’s key products.
Alphabet’s stock fell over 1% following the DOJ’s announcement.
This potential move would mark the first attempt to break up a tech giant in over two decades.
Google plans to appeal the court’s earlier decision.

Potential Breakup

The US Justice Department (DOJ) is reportedly considering recommending the judge break up Google, a historic move aimed at addressing Google’s monopoly in the search engine market. The DOJ’s proposals outlined in a 32-page document focus on structural changes to prevent Google from leveraging its products like Chrome, Play, and Android to benefit Google search. This possible breakup echoes previous antitrust cases, such as the one involving Microsoft over two decades ago. A landmark decision in August found Google guilty of monopolizing online search and advertising markets.

Alphabet, Google’s parent company, saw a 1% drop in its stock following the news. The DOJ’s move is part of a broader strategy to tackle anticompetitive behavior across various industries. This strategy aims to maintain competitive markets and ensure consumer protection. The DOJ suggests limiting or prohibiting default agreements and revenue-sharing arrangements related to search. A “choice screen” may also be required to allow users to select from different search engines.

DOJ weighs suggesting Google breakup as "remedy" to search monopoly after landmark case https://t.co/tmxffQd9e4

— Axios (@axios) October 9, 2024

Implications for Google

Google criticizes the DOJ’s proposals, arguing that they could negatively impact consumers, businesses, and developers. According to Google’s vice president of regulatory affairs, Lee-Anne Mulholland, the Department of Justice is “already signaling requests that go far beyond the specific legal issues” and could also undermine American innovation. Legal experts suggest the court may require Google to eliminate certain exclusive agreements, but a full breakup seems less probable.

Possible remedies in the specific case may include limiting Google’s contracts that set its search engine as default on browsers and devices. Google, which generated $48.5 billion from its search operations in 2021, plans to appeal the decision. Judge Amit Mehta is expected to decide on what remedies will be implemented, with trial phases likely commencing in 2025. The DOJ also recommends Google make its search index data available to competitors.

International Effects

Alongside the U.S., the European Union has also pushed back against Google’s market dominance. A federal judge recently required Google to open its Android app store to competition, setting another precedent for industry’s regulatory enforcement. Separately, the government considers allowing companies to opt out of having their data used by Google’s AI systems. Overall, these developments present significant challenges, ensuring its compliance with emerging global antitrust regulations.

This antitrust focus could drive changes in business practices not just for Google, but for the entire technology industry. Decisions made in the upcoming trial could affect the landscape of digital competition and economic fairness, impacting users, businesses, and future innovations globally.