In a landmark development, the US Department of Justice (DOJ) is considering a historic antitrust action that could result in the breakup of tech giant Google. This move follows a recent court ruling that determined Google’s dominance in the online search market constituted illegal monopolization.
According to sources reported by Bloomberg, the DOJ is weighing several potential remedies after US District Judge Amit Mehta’s decision on August 5. The ruling, delivered in the District of Columbia, found Google to be in violation of antitrust laws due to its monopolistic control over online search and search text advertisements.
Divestment of Key Assets
Among the most severe measures under discussion is the forced divestment of significant segments of Google’s business. Sources suggest that the Android operating system and the Chrome web browser, both integral to Google’s market dominance, are prime candidates for divestment. Android powers approximately 2.5 billion devices globally, while Chrome is a leading web browser.
Potential Sale of AdWords
Another significant aspect of the potential antitrust action involves the sale of AdWords, the platform through which Google sells text advertisements. Rebranded as Google Ads in 2018, AdWords is a critical revenue driver for the company, contributing around two-thirds of Google’s total revenue, which exceeded $100 billion in 2020.
Data Sharing and Exclusive Contracts
Less drastic measures being considered include requirements for Google to share more data with competitors. This could involve providing data access to rival search engines like Microsoft’s Bing or DuckDuckGo, similar to recent regulations imposed by European digital gatekeeper rules. Additionally, the DOJ may seek to ban exclusive contracts that secure Google’s search engine as the default on various devices and web browsers. Google has reportedly paid up to $26 billion to companies, including $20 billion to Apple Inc., for these arrangements.
AI Development and Competitive Fairness
The DOJ is also concerned about Google’s potential advantage in artificial intelligence (AI) development due to its search dominance. One possible remedy could be preventing Google from using website content to enhance its AI products without consent from content providers.
Historic Implications
Should the DOJ proceed with breaking up Google, it would represent the most significant antitrust action against a US company since the breakup of AT&T in the 1980s. The proposed measures would need to be approved by Judge Mehta, who would oversee Google’s compliance.
The DOJ is consulting with affected companies to gather input on the proposed remedies. In response, Google has announced plans to appeal Judge Mehta’s ruling. Kent Walker, Google’s President of Global Affairs, defended the company’s practices, asserting that its success stems from offering a superior product chosen by users for its quality. Walker criticized the ruling as an impediment to making Google’s high-quality search engine readily accessible.
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