Source-cnbc.com
DOJ Considers Structural Remedies
The U.S. Department of Justice (DOJ) has indicated that it is contemplating a potential breakup of Google as a remedy for the tech giant’s monopolistic practices in the search engine market. In a filing released late Tuesday, the DOJ recommended several changes to Google’s business operations aimed at curbing its monopoly. These include contract prohibitions, data-sharing requirements, and interoperability measures, which could reshape Google’s position in the digital ecosystem.
The DOJ is also evaluating both behavioral and structural remedies that would prevent Google from leveraging products like Chrome, Android, and the Play Store to bolster its dominance in search-related services. This move is particularly focused on emerging technologies like artificial intelligence. Moreover, the department is considering limiting default agreements and revenue-sharing deals, such as those Google has with Apple and Samsung, which cost the company billions of dollars annually. One proposed solution is a “choice screen,” allowing users to select alternative search engines, potentially diluting Google’s control over search distribution.
Impact of the Monopoly Ruling
These recommendations follow a ruling by a U.S. judge in August, which declared that Google holds a monopoly in the search market. The ruling is a result of a 2020 antitrust case brought by the DOJ, accusing Google of maintaining its market dominance through significant barriers to entry and creating a feedback loop that sustains its superiority. The court ruled that Google had violated Section 2 of the Sherman Act, which outlaws monopolies.
Kent Walker, Google’s President of Global Affairs, responded by affirming the company’s plan to appeal the ruling. Walker also highlighted that the court acknowledged the high quality of Google’s search products. Despite the ruling, Google aims to defend its business model, emphasizing that the case focuses on search distribution contracts rather than the broader scope of services and innovations Google provides.
Future Outlook and Industry Reactions
As the legal battle continues, the DOJ has also proposed that Google share its search index data, AI-driven search models, and ad-ranking data with competitors. This measure would aim to prevent Google from using its vast datasets to disadvantage other companies. The DOJ is also assessing restrictions on Google’s use of certain data that could create competitive disparities under the guise of privacy concerns.
However, a final decision on these remedies is not expected until August 2025, with a likely appeal from Google delaying any significant changes for years. In response to the DOJ’s latest filing, Google’s Vice President of Regulatory Affairs, Lee-Anne Mulholland, criticized the recommendations as “radical” and warned of unintended consequences for both consumers and businesses. Mulholland added that splitting off core services like Chrome or Android could have severe impacts on Google’s broader ecosystem.
Despite the ongoing antitrust case, Google continues to dominate the search market, generating $48.5 billion in revenue from its “Search & Other” segment in the second quarter of 2024, accounting for 57% of its parent company Alphabet’s total revenue. In a separate antitrust ruling, a U.S. judge issued a permanent injunction requiring Google to offer alternatives to its Google Play store, further pressuring the company’s business practices.
