The DOJ indicates that it is considering a Google breakup after the monopoly regime

The DOJ indicates that it is considering a Google breakup after the monopoly regime

U.S. Assistant Attorney General Jonathan Kanter speaks about the antitrust lawsuit against Live Nation Entertainment during a press conference with Attorney General Merrick Garland and Deputy Attorney General Lisa O. Monaco during a press conference at the U.S. Department of Justice in Washington, May 23, 2024. REUTERS/Ken Cedeno

Why did it happen? Reuters

The Justice Department recommended Google's search engine business practices late Tuesday, indicating it is considering a possible breakup of the tech giant as an antitrust remedy.

“Remedies needed to prevent and control monopoly maintenance may include contractual requirements and prohibitions; non-discriminatory product requirements; data and interoperability requirements; and structural requirements,” the department said in a filing.

The DOJ also said it is “considering behavioral and structural remedies that would prevent Google from using products like Chrome, Play and Android to facilitate Google Search and Google Search-related products and features – artificial intelligence including emerging search access points and features – over competitors or new entrants.”

In addition, the DOJ suggested limiting or prohibiting default agreements and “other revenue sharing arrangements related to exploration and exploration-related products.” That would include Google's search position deals with Apple's iPhone and Samsung devices — deals that cost the company billions of dollars a year. One way to do this, the company suggested, is to require a “choice screen” that allows users to choose from other search engines.

Such remedies would end “Google's control over today's distribution” and ensure that “Google cannot control tomorrow's distribution.”

The recommendations come after a US judge ruled in August Google Holding a monopoly in the search market. The ruling comes after the government filed a landmark lawsuit in 2020, alleging that Google created strong barriers to entry and a feedback loop that maintained its dominance while holding onto its share of the general search market. The court found that Google violated Section 2 of the Sherman Act, which is an antitrust statute.

Kent Walker, Google's president of global affairs, said the company plans to appeal the ruling and pointed to the court's emphasis on the high quality of Google's search product, which the judge noted in his ruling.

The DOJ recommended Google make its data available to competitors within its search indexes and models, including its AI-assisted search features and ad ranking data. The DOJ is also considering remedies that would “prohibit Google from using or retraining data that cannot be effectively shared with others based on privacy concerns,” according to the filing.

The recommendations are still far from being decided.

Judge Mehta said he would aim to rule on the remedy by August 2025, and that an appeal by Google would likely take years to have any final effect.

In response to Tuesday's filing, Lee-Anne Mulholland, Google's vice president of regulatory affairs, called the DOJ's recommendations “radical.”

“This case is about a set of search distribution agreements,” Mulholland said in a blog post. “Instead of focusing on that, the government appears to be pursuing a sweeping agenda that will affect numerous industries and products with significant unintended consequences for consumers, businesses and American competitiveness.”

He added that “splitting Chrome or Android will break them — and a lot of other things.”

According to some legal experts, the most likely outcome is that the court will ask Google to void some of the exclusive agreements it has with Apple. The court may suggest that Google makes it easier for users to use other search engines, experts told CNBC. However, experts believe that the chances of separation are low.

In the second quarter, “Google Search and Others” generated $48.5 billion in revenue, or 57% of Alphabet's total revenue. The company holds 90% of the search market share.

In a separate antitrust case this week, a US judge issued a permanent injunction that would force Google to offer an alternative to its Google Play Store for downloading apps to Android phones.

In September a judge wrapped up a trial for another antitrust case brought by the DOJ — albeit one over Google's ad tech business.

See: Judge orders Google to provide alternative to its Android App Store in Epic Games trial

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