In a significant move, the U.S. government announced on Tuesday it might request a court order mandating the breakup of Google’s parent company, Alphabet, Inc. (GOOGL.O), targeting core components like the Chrome browser and Android operating system. The government contends these services are integral to Google’s alleged monopoly over online search.
This unprecedented case follows an August ruling where a federal judge determined that Google, which handles 90% of all U.S. internet searches, has established an illegal monopoly. The proposed actions could potentially redefine how Americans access information online and could diminish Google’s revenue, creating more opportunities for its competitors.
“Fully remedying these harms requires not only ending Google’s control of distribution today, but also ensuring Google cannot control the distribution of tomorrow,” stated the Justice Department.
Prosecutors highlighted that the suggested remedies would prevent Google from extending its dominance to the emerging artificial intelligence (AI) sector. The Justice Department is also considering halting Google’s practice of paying other companies to pre-install or set Google’s search engine as the default on devices.
In 2021 alone, Google paid $26.3 billion to tech giants such as Apple (AAPL.O) and other device manufacturers to maintain its dominance. Google, which plans to appeal the case, criticized the proposed measures as “radical” and argued that they extend beyond the case’s specific legal issues.
Google insists that users choose its search engine due to its superior quality and that it faces substantial competition from companies like Amazon (AMZN.O). According to Google, users are always free to switch to other search engines.
As one of the largest corporations globally, with a market capitalization surpassing $2 trillion, Alphabet now finds itself under increasing pressure from legal authorities and competitors. In a separate ruling this week, a judge ordered Google to open its Google Play app store to greater competition, allowing Android apps to be accessed from alternative sources. Additionally, the Justice Department is pursuing a separate case to break up Google’s web advertising division.
The Justice Department has hinted that it might push for Google to make its search data, AI models, and other key tools available to competitors in the AI field. Prosecutors also suggested measures to prevent Google from restricting access to web content for AI competitors and to allow websites to opt-out of having their content used for AI training.
Google has warned that the government’s interventions could hinder the burgeoning AI sector, arguing that they would distort market incentives and harm emerging business models.
“There are enormous risks to the government putting its thumb on the scale of this vital industry — skewing investment, distorting incentives, hobbling emerging business models — all at precisely the moment that we need to encourage investment,” Google stated.
The Justice Department is expected to submit a more comprehensive proposal by November 20, after which Google will have until December 20 to present its own remedies. U.S. District Judge Amit Mehta’s August ruling has bolstered antitrust authorities, who have taken on several Big Tech companies, including Meta (META.O), Amazon, and Apple, over alleged monopolistic practices.
Some of the proposed break-up measures have received support from smaller tech firms such as Yelp (YELP.N) and DuckDuckGo, a rival search engine. Yelp has previously suggested that Google’s Chrome browser and AI services should be separated, and called for a prohibition on Google giving preference to its own local business listings in search results.
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