US mulls Google breakup in landmark antitrust case over search monopoly

The US Justice Department is weighing unprecedented action against Google as it contemplates a potential breakup of the tech giant to address concerns over its dominance in the online search market.

In a significant antitrust case, the agency is exploring structural remedies, including the possibility of forcing Google to sell off parts of its business, a move that would echo the most significant antitrust breakup since the government’s failed attempt to split Microsoft two decades ago.

In a court filing submitted Tuesday, federal antitrust officials indicated that US District Judge Amit Mehta may be presented with several options to mitigate the harm caused by Google’s monopolistic practices.

These remedies include requiring Google to grant greater access to the data it uses to generate search results and develop its artificial intelligence (AI) products.

“The Justice Department is considering behavioral and structural remedies that would prevent Google from using products such as Chrome, Play, and Android to advantage Google search,” the filing stated, highlighting how the tech giant could be prohibited from leveraging its other platforms to stifle competition in emerging markets, including AI.

Potential remedies for Google’s dominance

The 32-page document, which outlines the potential remedies, suggests that further details will be presented in the coming month as the case enters its next phase.

Among the proposals, regulators are considering giving advertisers more control over their campaigns, with specific focus on Google’s dominance in search text ads.

The department is also considering a requirement that Google give websites more flexibility in opting out of its AI products.

Furthermore, the Justice Department hinted it might seek to block Google from investing in, or acquiring, potential competitors in the search space, a move aimed at preventing the tech giant from neutralizing threats through financial dominance.

In response to the filing, futures for the Nasdaq 100, which includes Google’s parent company Alphabet Inc. among its top holdings, dipped slightly, reflecting the market’s sensitivity to the potential ramifications of such a historic move.

Google pushes back, calling filing “radical”

Google quickly hit back at the Justice Department’s proposal, characterizing the recommendations as extreme.

Lee-Anne Mulholland, Google’s vice president of regulatory affairs, expressed concern in a blog post:

We believe that today’s blueprint goes well beyond the legal scope of the Court’s decision about Search distribution contracts.

The company argued that implementing these remedies would lead to unintended consequences for both consumers and businesses, while also undermining US competitiveness on a global stage.

Google’s defense highlights its insistence that the proposed remedies, if implemented, would disrupt its core business, potentially harming users and advertisers alike.

A historic move in antitrust law

This case represents the most aggressive action against a major technology company over illegal monopolization in decades.

At the core of the Justice Department’s argument is that Google has unfairly leveraged its agreements with other companies to make its search engine the default choice on smartphones and web browsers, consolidating its power in the digital ecosystem.

The Android operating system, used in millions of smartphones worldwide, is also a key factor in Google’s dominance, enabling the company to promote its search engine through pre-installed apps and services.

Regulators argue that Google has benefited from its market dominance through these practices, leading to an unfair advantage over rivals.

The Justice Department is also exploring measures related to Google’s artificial intelligence products, aiming to address concerns over its extensive control in emerging AI markets.

Additionally, Google’s powerful search text ad business is under scrutiny, with regulators seeking to impose more transparency and control for advertisers over where their ads are displayed.

Legal Battle Far from Over

Judge Amit Mehta, who ruled earlier this year that Google violated antitrust laws in both its search and search advertising markets, is expected to hold a trial next spring to determine what remedies, if any, will be imposed. A final decision is anticipated by August 2025.

Google, which plans to appeal Mehta’s initial ruling, must wait for the court to finalize its remedy before moving forward with its appeal. The company’s legal battles extend beyond this case, as Google is also facing separate antitrust lawsuits involving its dominance in online display advertising and its app distribution practices on Android smartphones.

Antitrust pressures against the tech giant are mounting. Just this week, a separate federal judge ruled that Google must open up its app store for three years to address antitrust concerns raised by Epic Games Inc. The company has announced plans to appeal that decision as well.

Uncertain future for Google

Despite the significant legal challenges, some experts are skeptical about whether a breakup of Google is truly imminent.

Daniel Ives, managing director and senior equity analyst at Wedbush Securities, voiced doubts about the likelihood of a forced divestiture.

“We believe a breakup of Google is unlikely at this point despite the antitrust swirls,” he said.

Google will battle this in the courts for years.

Adding to the complexity, a coalition of states involved in a separate lawsuit against Google has suggested the company might be required to fund a public campaign educating users on how to switch search engines, should they wish to move away from Google’s dominant platform.

With several antitrust cases moving through the courts simultaneously, Google faces a long and uncertain legal battle.

What’s clear is that the Justice Department is determined to curtail the tech giant’s influence over the online search market—potentially reshaping the future of digital search as we know it.

The post US mulls Google breakup in landmark antitrust case over search monopoly appeared first on Invezz