Google Faces Potential Breakup After Landmark Antitrust Ruling

Google's foes on both coasts consider what it takes to crack a monopolist

In the wake of last week's landmark federal court decision that deemed Google an illegal monopoly, Google's foes are stepping up efforts to craft a legal case for something unthinkable until recently: the internet giant's breakup. If Judge Amit Mehta rules that way in Washington in the months ahead, it would be the first time federal antitrust law has been used to dismantle a company in a generation. And the consequences of such an action would be complex: Scholars are still arguing more than four decades later over how much the breakup of AT&T fueled or diminished American innovation. Meanwhile on Wednesday, a federal judge in San Francisco signaled that he would "tear the barriers down" that have given Google a near-lock on Android app downloads and digital purchases. "The world as it exists today is the product of monopolistic conduct. That world is changing," said James Donato, a federal judge in the U.S. District Court for the Northern District of California, in a separate case challenging the Alphabet unit's power. In Washington, Mehta, a district judge in the U.S. District Court for the District of Columbia, ruled last week that Google's search business operates as an illegal monopoly, the first such victory for the Justice Department since 2000. Since then, both legal teams have scrambled to prepare their cases for the second half of the trial, which will determine what penalties -- called "remedies" -- will be imposed on Google. A hearing is set for early September. Phil Weiser, the Colorado attorney general who has been leading a group of states that joined the Justice Department lawsuit against Google, said in an interview on Wednesday that his team was looking into breaking up Google, as they studied their options alongside the Justice Department, including a potential ban on the company paying phone makers to pre-install Google search. "Divestiture remedies, other conduct remedies, as well as an end to the illegal contracts are all on the table," Weiser said. "Our position is it's simply not enough to end the illegal conduct. There needs to be additional steps that restore competition and enable rivals to be able to compete effectively after they've been squelched through illegal conduct by Google." Weiser said his goal was to come up with a united stance between the state attorneys general and the Justice Department on the remedies they will seek from the court, though he said the states will have the option to put forward a different request from the Justice Department. Two people familiar with the matter told The Washington Post that the Justice Department is considering all options, including requesting the divestiture of Google's Chrome browser and Android smartphone operating system, in line with earlier reports by Bloomberg and the New York Times. The Justice Department has not publicly tipped its hand on what remedies it will seek from Mehta. "The Justice Department is evaluating the court's decision and will assess the appropriate next steps consistent with the court's direction and the applicable legal framework for antitrust remedies," it said in a statement. "No decisions have been made at this time." Google declined to comment. The company's stock fell 2.4 percent on Wednesday. Tim Wu, an antitrust scholar sometimes called the architect of the Biden administration's antitrust policies, said he has been in touch informally with Justice Department lawyers and believes they are interested in a solution in which Google would have to sell off part of the company. "They don't want to have a wimpy remedy," Wu said. "I think they've learned their lesson from about 10 years of kind of 'stop doing that' remedies, the wimpy era of remedies ... I think their instinct is that structural remedies -- that means divestments -- are usually better." Wu proposed that the court require Google to divest Chrome and Android in a New York Times opinion piece on Tuesday. He said his rationale was that Chrome and Android -- which currently are preloaded with Google search as the default -- would no longer have such a strong incentive to favor Google search, allowing space for rival search engines to have a fighting chance. Wu also suggested the court order Google to grant other companies open access to its artificial-intelligence technologies and training data, in an effort to prevent Google's search monopoly from carrying forward into newer technologies. Weiser, the Colorado attorney general, said there is precedent for requiring companies to share resources to resolve their monopoly issues, and this was an avenue they were studying. "The idea of mandated access to resources, sharing requirements, those are absolutely the sorts of measures that will be looked at, and that, ultimately, we could potentially put before the judge," he said. A hearing in Donato's San Francisco courtroom on Wednesday showed that courts are willing to consider significant changes to undo Google's illegal monopoly behavior. A jury last year found that Google broke competition laws in how it ran its Google Play app store. Donato at the Wednesday hearing continued to hash over details of what could be broad changes in how people find apps for Android phones and pay for digital goods inside apps. Under some of the proposed changes, Android apps might be able to list not only in Google's official app store but in many alternative app stores, which Android phone users could also download from Google Play. The goal, Donato said in court, is to "grow a garden of competitive app stores" to undo Google's monopoly. Bill Baer, who was the Justice Department's antitrust chief in the Obama administration, said the European Union's recent experience might tip the court toward considering stronger measures such as a divestment in the Washington case. The E.U. required new smartphones to include a "choice screen" for users to pick their preferred search engine, but users have become so accustomed to the ubiquity of Google that the choice had limited effect in boosting popularity of smaller contenders. "Judge Mehta is a thoughtful guy," Baer said. "He's not going to rush into anything. But if the test of an effective remedy is stimulating competition in a market that is now dominated by a monopolist, I think he likely will be open to some significant relief, more than you might get in a merger review where they allow it to go through with some behavioral changes." Phil Verveer, the attorney who drafted the lawsuit that led to the breakup of AT&T, said pursuing a divestment of parts of Google would require considerations of how the new company maintains independence, and who would be a suitable buyer. "For the Android operating system, if you wanted to have it spun off, what would be the economics in terms of making it ... independent and viable? And if you wanted to require it to be divested in terms of a sale to someone else, what kind of someone else would be appropriate?" he said. "These are really difficult questions from the standpoint of trying to construct a truly effective remedy." There are scarce precedents to look to. The last time a court ordered a company's breakup under federal antitrust law, it was Microsoft in 2000. The case was eventually settled with Microsoft staying intact. The last time a major tech company was broken up under Section 2 of the Sherman Antitrust Act was AT&T in 1982. Gary Reback, a Silicon Valley antitrust lawyer who spearheaded efforts that led to the Microsoft trial, said simply being the subject of an antitrust case seemed to have had more of an effect on reining in Microsoft's behavior in 2000 than Google's today -- an argument, he suggested, for more substantive remedies. "For many years, we had a saying in Silicon Valley that the trial is the remedy," he said. "But [with Google] that's not what happened. They've lost the trial, but it doesn't seem like that has retarded their aggressive conduct in any respect." As for the legacy of the earlier AT&T case, opinions are mixed. Wu and some others say the dismantlement of the lumbering monopoly unleashed a new era of competition in communications technology of all stripes that led to no less than the internet boom. Others point to the withering away of AT&T's storied R&D unit Bell Labs -- which invented the transistor, the laser and the photovoltaic cell -- and the United States eventually having no major player at all in the telecommunications gear industry, which AT&T's manufacturing arm had dominated. "There were clearly trade-offs, but I don't think it's close," said Wu. "The track record is pretty clear as to the benefits from the AT&T breakup." Verveer said he and other Justice Department attorneys had worried "a lot" about the impact on Bell Labs' innovation as they pursued the case against AT&T, but that the unit's research was ultimately being funded by AT&T's illegal monopoly. "No one would deny that it was a national treasure," he said. "But it was a national treasure not being paid for out of general revenue, but was being paid for by what effectively were excessive charges for telephone service." Verveer said he believed Bell Labs' innovative value wasn't lost as the company faded, and was absorbed into other parts of the U.S. economy. Not everyone has come to that conclusion. Rob Atkinson, founder of the Information Technology and Innovation Foundation, argues that there's a direct line from the AT&T breakup to the United States being surpassed in the telecommunications sector by overseas rivals like China's Huawei Technologies, even as he acknowledged mismanagement at the AT&T unit Western Electric, later renamed Lucent. "I don't think Huawei would have gained global market share as they did if Lucent, or Western Electric at the time, had been allowed to keep going," he said. "That was a self-inflicted wound." Google has made a similar argument before Mehta, saying that its moonshot R&D projects depend on having the deep pockets that come with its success in search. Others say that's now beside the point: The court has already deemed Google an illegal monopoly, requiring the imposition of remedies sufficient to restore competition. "Analysts and others are beginning to realize that it really needs to be a significant remedy in order to make the search market competitive again," Baer said.

US considers a rare antitrust move: breaking up Google

By Leah Nylen and Anna Edgerton, Bloomberg News The Tribune Content Agency WASHINGTON - A rare bid to break up Alphabet Inc.'s Google is one of the options being considered by the Justice Department after a landmark court ruling found that the company monopolized the online search market, according to people with knowledge of the deliberations. The move would be Washington's first push to dismantle a company for illegal monopolization since unsuccessful efforts to break up Microsoft Corp. two decades ago. Less severe options include forcing Google to share more data with competitors and measures to prevent it from gaining an unfair advantage in AI products, said the people, who asked not to be identified discussing private conversations. Regardless, the government will likely seek a ban on the type of exclusive contracts that were at the center of its case against Google. If the Justice Department pushes ahead with a breakup plan, the most likely units for divestment are the Android operating system and Google's web browser Chrome, said the people. Officials are also looking at trying to force a possible sale of AdWords, the platform the company uses to sell text advertising, one of the people said. The Justice Department discussions have intensified in the wake of Judge Amit Mehta's Aug. 5 ruling that Google illegally monopolized the markets of online search and search text ads. Google has said it will appeal that decision, but Mehta has ordered both sides to begin plans for the second phase of the case, which will involve the government's proposals for restoring competition, including a possible breakup request. Alphabet shares fell as much as 2.5% to $160.11 in after-hours trading before erasing some losses. A Google spokesman declined to comment on the possible remedy. A Justice Department spokeswoman also declined to comment. The U.S. plan will need to be accepted by Mehta, who would direct the company to comply. A forced breakup of Google would be the biggest of a U.S. company since AT&T was dismantled in the 1980s. Justice Department attorneys, who have been consulting with companies affected by Google's practices, have raised concerns in their discussions that the company's search dominance gives it advantages in developing artificial intelligence technology, the people said. As part of a remedy, the government might seek to stop the company from forcing websites to allow their content to be used for some of Google's AI products in order to appear in search results. Divesting the Android operating system, used on about 2.5 billion devices worldwide, is one of the remedies that's been most frequently discussed by Justice Department attorneys, according to the people. In his decision, Mehta found that Google requires device makers to sign agreements to gain access to its apps like Gmail and the Google Play Store. Those agreements also require that Google's search widget and Chrome browser be installed on devices in such a way they can't be deleted, effectively preventing other search engines from competing, he found. Mehta's decision follows a verdict by a California jury in December that found the company monopolized Android app distribution. A judge in that case hasn't yet decided on relief. The Federal Trade Commission, which also enforces antitrust laws, filed a brief in that case this week and said in a statement that Google shouldn't be allowed "to reap the rewards of illegal monopolization." Google paid as much as $26 billion to companies to make its search engine the default on devices and in web browsers, with $20 billion of that going to Apple Inc. Mehta's ruling also found Google monopolized the advertisements that appear at the top of a search results page to draw users to websites, known as search text ads. Those are sold via Google Ads, which was rebranded from AdWords in 2018 and offers marketers a way to run ads against certain search keywords related to their business. About two-thirds of Google's total revenue comes from search ads, amounting to more than $100 billion in 2020, according to testimony from last year's trial. If the Justice Department doesn't call for Google to sell off AdWords, it could ask for interoperability requirements that would make it work seamlessly on other search engines, the people said. Another option would require Google to divest or license its data to rivals, such as Microsoft's Bing or DuckDuckGo. Mehta's ruling found that Google's contracts ensure not only that its search engine gets the most user data - 16 times as much as its next closest competitor - but that data stream also keeps its rivals from improving their search results and competing effectively. Europe's recently enacted digital gatekeeper rules imposed a similar requirement that Google make available some of its data to third-party search engines. The company has said publicly that sharing data can pose user privacy concerns, so it only makes available information on searches that meet certain thresholds. Requiring monopolists to allow rivals to have some access to technology has been a remedy in previous cases. In the Justice Department's first case against AT&T in 1956, the company was required to provide royalty-free licenses to its patents. In the antitrust case against Microsoft, the settlement required the Redmond, Washington, tech giant to make some of its so-called application programming interfaces, or APIs, available to third-parties for free. APIs are used to ensure that software programs can effectively communicate and exchange data with each other. For years, websites have allowed Google's web crawler access to ensure they appear in the company's search results. But more recently some of that data has been used to help Google develop its AI. Last fall, Google created a tool to allow websites to block scraping for AI, after companies complained. But that opt-out doesn't apply to everything. In May, Google announced that some searches will now come with "AI Overviews," narrative responses that spare people the task of clicking through various links. The AI-powered panel appears underneath queries, presenting summarized information drawn from Google search results from across the web. Google doesn't allow website publishers to opt-out of appearing in AI Overviews, since those are a "feature" of search, not a separate product. Websites can block Google from using snippets, but that applies to both search and the AI Overviews. While AI Overviews only appear on a fraction of searches, the feature's roll-out has been rocky after some excerpts offered embarrassing suggestions, like advising people to eat rocks or to put glue on pizza.

Justice Department considers Google breakup proposal

Judge Amit Mehta of the US District Court for the District of Columbia ruled that $26 billion in payments that Google made to other companies to make its search engine the default option on smartphones and web browsers effectively blocked any other competitor from succeeding in the market. Mehta's ruling came after a 10-week trial in 2023 -- the first on monopolization charges to pit the federal government against a US technology company in more than two decades. The case is one of several antitrust actions against big tech companies being pursued by the administration of President Joe Biden, which has made promoting competition in commerce central to its economic policy. The Justice Department and attorney generals alleged that Google, whose search engine controls nearly 90% of online queries, has paid billions of dollars to maintain a monopoly over the search market via agreements with tech rivals, smartphone manufacturers and wireless providers. In exchange for a cut of advertising revenue, those companies, including Apple Inc. and Samsung Electronics Co., agreed to set Google as the default on browsers and mobile devices. The deals locked up key access points, the plaintiffs alleged, preventing rival search engines such as DuckDuckGo or Microsoft Corp.'s Bing from gaining the volume of data they need to improve their products and challenge Google. Mehta's decision found that Google illegally monopolized the market for general search services and search text advertising -- the ads that appear at the top of the search results page. "Google's distribution agreements foreclose a substantial portion of the general search services market and impair rivals' opportunities to compete," Mehta said. As a result of its monopoly, Google has been able to increase prices for text advertising without constraints, he found. Mehta's decision focuses solely on whether Google broke antitrust laws. He plans to hold a separate trial on how to remedy Google's illegal conduct. The Justice Department is mulling whether to propose a breakup of Google, Bloomberg reported. It would also likely call for a ban on the exclusive contracts at the center of the case, according to people with knowledge of the deliberations. Other options under review include forcing Google to share more data with competitors and measures to prevent it from gaining an unfair advantage in AI products. If the Justice Department pushes ahead with a breakup plan, the most likely units for divestment are the Android operating system and Google's web browser Chrome, said the people, who asked not to be named discussing private conversations. It's also looking at a possible sale of AdWords, the platform the company uses to sell text advertising, said one of the people. If the judge orders such a separation, it would mark the biggest forced breakup of a US company since AT&T was dismantled in 1984. Google said it plans to appeal Mehta's ruling. The company noted that Mehta's decision states that Google is "the best search engine in the US" and has "superior product quality" because of its investments in innovation. While the company acknowledges that it pays for its search engine to be pre-installed on mobile phones and browsers, it says those deals are benign, likening them to deals that cereal companies make with grocery stores for prime shelf space. Google's representatives have repeatedly said that competition is just "one click away." They are meant to protect competition in commerce. In the US, it's not illegal to be big and powerful; gaining a monopoly position from superior products or better management is considered a reward for success in the marketplace. However, it's illegal for a monopoly to take predatory steps to stop rivals that might threaten its dominance. Any attempts to illegally maintain a monopoly is fair game for antitrust enforcers and could result in penalties or a forced breakup. Europe, mainly. Since 2010, when the European Commission received its first formal complaint against Google's competitive practices, the company has received a trio of penalties totaling more than €8 billion ($8.6 billion). Google continues to fight those fines, including a landmark €4.34 billion penalty for how it runs its Android mobile operating system, in the courts. In June, the EU made additional charges against Google, accusing it of favoring its advertising technology business to the detriment of adtech rivals, advertisers and online publishers, and told it to divest the entire division. In March, the EU's Digital Markets Act went into effect on Google and other designated "gatekeepers" of the online economy. Under the act, they won't be allowed to favor their own services over those of rivals on their platforms, will be barred from combining personal data across their different services, and will be prohibited from using data they collect from third-party merchants to compete against them. The European Commission, the EU's executive arm, has opened a probe into whether Google is complying with the new rules in connection with its app store and search engine. Biden's administration has accelerated an anti-monopoly crackdown that began under then-President Donald Trump. In the final months of the Trump administration, the Justice Department filed the first lawsuit against Google, and the Federal Trade Commission filed a suit against Facebook, accusing it of illegally maintaining a monopoly on personal social networking in part by acquiring rivals Instagram and WhatsApp; the FTC seeks the breakup of Facebook parent Meta Platforms Inc. Those actions, continued by Biden officials, are the biggest antitrust moves against tech giants since the US sued Microsoft in the 1990s, leading to an eventual settlement in which the company curtailed some business practices. Last year, the FTC sued Amazon.com Inc. for monopolizing online marketplace services by degrading quality for shoppers and overcharging sellers. In March, the Justice Department filed suit against Apple for blocking rivals from accessing hardware and software features on its popular devices.

Google's monopoly drama should have Apple, Meta, and Amazon nervous

This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in. "Google is a monopolist, and it has acted as one to maintain its monopoly," Mehta wrote. The Department of Justice is now mulling whether to seek a potential breakup of the company, Bloomberg reported earlier this week. Google has previously said it plans to appeal Judge Mehta's ruling, and that the decision "recognizes that Google offers the best search engine, but concludes that we shouldn't be allowed to make it easily available." Business Insider reached out to the company for any further comment. With Google on its heels -- the developments are a clear signal to other Big Tech companies that they should be worried. It's not the first time Big Tech has lost an antitrust suit and faced a potential split. Microsoft was ruled a monopoly in the 90s, and while the initial remedy was to break up the company, the tech giant ended up settling. But the Google development is the biggest Big Tech antitrust ruling since then, and Wedbush Securities analyst Dan Ives wrote in an analyst note Wednesday that the decision comes after the industry has gotten stronger under the AI revolution. He told Business Insider that Google's loss gives the Justice Department momentum in its "Big Tech battle." "The Big Tech antitrust drumroll will continue," Ives told BI, adding that "Big Tech has a target on its back." Under President Joe Biden's administration -- and in particular, with the appointment of FTC Commissioner Lina Khan -- the US government has taken an aggressive antitrust approach toward major tech companies. In addition to the case against Alphabet that Mehta presided over, the Justice Department and an array of states have brought antitrust lawsuits against Apple for how it treats competitors to its in-house iPhone apps, Amazon for using its retail dominance to squeeze third-party sellers on its platform, and Meta amid its attempts to dominate the social media market through acquisitions like Instagram and WhatsApp. All of these cases are resource-intensive, have little precedent, and are the most ambitious antitrust lawsuits in decades. One big consequence of the Google ruling is it will give federal agencies a boost of confidence that the risk is worth it, according to former Federal Trade Commission chair William Kovacic. "It's a huge shot in the arm to your team," Kovacic, now a professor at the George Washington University Law School, told BI. "And your success in all these other matters involves having more people fully committed and willing to work their fingers to the bone to make this work. Judge Mehta's ruling suggests that the sacrifice, the effort, is worth it." Apple, Meta, and Amazon did not immediately respond to requests for comment. To win an antitrust case, plaintiffs need to prove that a particular company illegally dominates a particular market. Often, the cases get stuck on the question of how to define a particular market in the first place. Defendants typically define the market broadly, arguing they're just one fish in a big pond. Plaintiffs try to define the market in narrow terms, arguing the companies are such big fish that they are illegally taking up space in a very small pond. A federal judge previously tossed a lawsuit against Meta over these ambiguities, ruling that regulators didn't sufficiently define the social media market that the FTC alleged Meta monopolized before the regulator refiled its case. Judge Mehta's mammoth Google ruling shows judges exactly how to handle the market-definition puzzle, according to Bill Baer, a former top antitrust lawyer at the Justice Department. The judge used a landmark 2001 United States Court of Appeals decision against Microsoft and demonstrated how its findings could be mapped onto Alphabet's conduct to dominate the search market for Google. That same strategy could be used by other judges overseeing cases against Amazon, Apple, or other tech companies, Baer told BI. "That analytical process of figuring out what, in real terms, competes with other things, and not let the defendant kind of throw spaghetti at the wall and see what sticks, is one of the hallmarks of the Google decision," Baer said. Big Tech companies normally hire econometricians to create big, complicated models to define big, complicated markets, according to Rebecca Allensworth, a professor of antitrust law at Vanderbilt University Law School. It's an expensive, resource-intensive approach to defining markets for these cases. Mehta, however, adopted a more commensensical standard, favored by the Justice Department. Instead of complex mathematical models, Mehta looked at internal documents, the conduct of the businesses themselves, and testimony from rival companies to define the "search market" Google monopolized. If other judges follow suit and follow the same standard, it could lower the bar for bringing antitrust lawsuits in the first place. "If the bar is you have to prove this to a mathematical certainty, you're just going to throw out a lot of cases," Allensworth said. Tech companies may not be rushing to change their entire business models, but the recent court decision could make them more cautious about acquisitions. But the Google ruling doesn't necessarily mean regulators will face success pursuing similar judgments against other tech giants. Wolfe Research analyst Shweta Khajuria told BI Google's lawsuit may be different from other Big Tech players because Google has a "much more dominant presence" in Search than any other company has in its respective categories. Meta still competes with Snapchat and TikTok, Khajuria said. But the Google lawsuit is significant because it's "by far the biggest" antitrust case, and it will serve as a bellwether for other companies, Khajuria said. "The underlying takeaway is that no company, no matter how big they are, is above the law," Khajuria said. Emarketer analyst Max Willens isn't convinced that the ruling should make other tech giants concerned. He told BI that the ruling against Google "shouldn't necessarily signal that these other companies" are in bad shape. "All of these lawsuits involve very different circumstances," Willens said. Aside from the difference in lawsuits, Willens also said Google will "vigorously defend itself" and appeal the decision, which will probably delay the final verdict by years. Until the final verdict comes out, companies aren't going to preemptively change their businesses, Willens said. "It's a change of pace to Big Tech," Willens said. "It's new, but it's not going to cause them to take a measure so drastic that it would impair their businesses." Khajuria also said she doesn't anticipate companies taking proactive action to prevent a similar outcome. However, she said the tech giants might be more cautious about making large acquisitions that could draw attention to them. Ives also said that it's unlikely business models will dramatically change, but he said the decision may push Apple to settle its lawsuit before it goes to court. Ives wrote in a Wedbush note to investors that although the case is expected to last for years, he predicted a settlement will likely be reached in the next 12 to 18 months. But it's clear that Judge Mehta's decision in the Alphabet cases has pierced any perception that Big Tech companies -- with their high-powered lawyers and massive resources -- are invincible in the courts. "There's a vibe, and that's really important," Allensworth told BI. "There's a sense that in a very high profile case, by a very thoughtful, legalistic, kind of nonpartisan judge saying that this Big Tech company is a monopolist." A bombshell ruling like that is bound to make the other tech giants sit up straight.

Justice Department Weighs Breakup Of Google After Antitrust Ruling: Report

The U.S. Justice Department is weighing the unprecedented move of breaking up Alphabet's Google following a landmark ruling that found the tech giant guilty of monopolizing the online search market. According to Bloomberg, which spoke to insiders, this drastic step is among several options under consideration as officials look to curb Google's reach. If pursued, this would mark Washington's first major attempt to dismantle a corporation for illegal monopolization since the unsuccessful efforts against Microsoft two decades ago. Less severe measures being discussed include mandating Google to share more data with competitors or imposing restrictions to prevent it from gaining an unfair edge in artificial intelligence products. One likely outcome of the government's action, regardless of its severity, is a ban on the exclusive contracts that were a central issue in the case against Google. Should the Justice Department proceed with the breakup plan, the potential targets for divestiture could include Google's Android operating system and its web browser Chrome. The Android operating system powers approximately 2.5 billion devices globally. There's also talk of a possible sale of Google's AdWords platform, the company's primary tool for selling text-based advertisements. The discussions gained momentum after Judge Amit Mehta's August 5 ruling, which concluded that Google had illegally maintained its monopoly in online search and search advertising markets. Any government plan would need to be approved by Judge Mehta, who would then direct Google to comply. A forced breakup would be the largest of its kind since the dismantling of AT&T in the 1980s. Concerns raised by Justice Department attorneys during consultations with businesses affected by Google's practices suggest that the company's dominance in search also grants it significant advantages in AI development. As part of the potential remedies, the government could seek to prevent Google from compelling websites to allow their content to be used in the company's AI products as a condition for appearing in search results. Judge Mehta's ruling was based on Google's agreements with device manufacturers, which mandate the inclusion of its search widget and Chrome browser in a way that blocks competitors from gaining a foothold. Google reportedly paid up to $26 billion to secure its search engine as the default option on various devices and browsers, with $20 billion of that sum going to Apple. Judge Mehta's ruling also determined that Google monopolized the market for search text ads, which are displayed at the top of search results pages and are a significant revenue source for the company. Should the Justice Department refrain from demanding the sale of AdWords, it might instead require the platform to be made interoperable with other search engines.

Google Breakup A Possibility After Monopoly Ruling: Report

Bloomberg reported that, even without the divestitures, the government will likely seek a ban of the "exclusive distribution agreements" at the heart of the case. The U.S. Department of Justice is considering a divestiture of Google's Android operating system, AdWords ad sales platform and web browser, Chrome, after a judge ruled the tech giant is a monopoly in the online search and text advertising markets. Citing anonymous "people with knowledge of the deliberations," Bloomberg reported Tuesday that, even without the divestitures, the government will likely seek a ban of the "exclusive distribution agreements" that led to U.S. District Judge Amit Mehta ruling against Google on Aug. 5 in the landmark case. CRN has reached out to Google and the Justice Department for comment. [RELATED: Google Gets Character.AI Co-founders In New Deal] The government could also pursue less severe punishment to make competition fair again, including forcing Google to share data with rivals and mechanisms to keep Google from gaining an unfair advantage in the growing artificial intelligence market, according to Bloomberg. Google requires websites to allow Google AI products to leverage their content to appear in search results. Another option is for requiring Google to implement more interoperability with other search engines or license or divest its data to rivals. Google plans to appeal the decision, according to Bloomberg. In a post on Microsoft-owned social media platform LinkedIn, Marc Rotenberg - a Georgetown University adjunct professor and founder and president of the Center for AI and Digital Policy (CAIDP) - said "remedies in antitrust cases are not easy." "You can break up companies, but the parts tend to congeal and reform like the evil robot in the Terminator series that resumed its shape after a shotgun blast from Arnold Schwarzenegger," Rotenberg wrote. "Scary." Rotenberg proposed as remedies the limit of "collection and use of personal data by Internet advertisers ... prohibit for kids ... encourage the development of advertising techniques that are less privacy-invasive" and "focus on data minimization." "Let advertising companies compete based on the quality of their products and messages, not on manipulating consumers," he said. "That would be a great outcome!" Alden Abbott - former general counsel for the U.S. Federal Trade Commission (FTC) and now a senior research fellow at George Mason University - wrote in an article for Forbes that "a federal appeals court may (but is not certain to) overturn the trial court's decision on liability" and that "this process could drag on for years." "The very conduct that Google engaged in enhanced its internet general search engine (GSE) quality, a reality at odds with a finding of anticompetitive monopolization," Abbott said in the article. "What's more, there is no good reason to believe that such behavior significantly affected consumer GSE choice. To the contrary, by improving GSE quality, that behavior likely raised consumer welfare, which the Supreme Court has deemed the overarching goal of antitrust enforcement." A separate Google antitrust case focused on digital advertising has a trial set for September. A government breakup of Google would mark the biggest dismantling since AT&T in the 1980s. About 2.5 billion devices worldwide use Android, and Google paid upwards of $26 billion to companies to make its search engine the default for third-party browsers and devices. Most of that money went to Apple, according to Bloomberg. In the 1950s, the Justice Department required AT&T to provide licenses to its patents without royalties to remove unfair competition. And in the landmark Microsoft antitrust case, the vendor had to make application programming interfaces (APIs) available for free to make the competitive landscape more fair, according to Bloomberg. Google has more than 100,000 channel partners worldwide, according to CRN's 2024 Channel Chiefs. Most of these partners work with Google's cloud and data analytics portfolio as opposed to the ad platforms the antitrust case focused on. But the case is part of a trend of the U.S. and other governing bodies putting more scrutiny on deals by big technology vendors and how those deals affect competition. In July, the United Kingdom's Competition and Markets Authority (CMA) published a letter saying that it can "begin an investigation" into an unusual deal between Microsoft and AI upstart Inflection that resulted in Microsoft hiring Inflection's co-founder and CEO. In January, the FTC announced that Microsoft, OpenAI, Amazon, Google parent Alphabet and Anthropic needed to provide information on their recent investments and partnerships.

Justice Department considering push for historic break up of Google...

The Justice Department is reportedly considering a push for a historic breakup of Google's business empire after a federal judge ruled the Big Tech giant has an illegal monopoly over online search. DOJ attorneys could ask Judge Amit Mehta to order Google to sell portions of its business - with potential candidates for divestment including its Android operating system, Chrome web browser and advertising platform AdWords, Bloomberg reported. A potential sell-off of Android - the world's most widely-used operating system - has generated the most discussion among the DOJ attorneys crafting the agency's plan, the outlet said, citing sources with knowledge of the agency's discussions. The feds are also weighing "less severe" options, such as requiring Google to share data with rival search engines such as DuckDuckGo and Microsoft's Bing. They could also seek to impose restrictions on Google's artificial intelligence products to prevent it from gaining an unfair advantage. For example, the DOJ could ask Mehta to block Google from requiring companies to allow it to "scrape" their content in exchange for appearing in search results. In a landmark ruling last week, Mehta determined that Google is a "monopolist" that has relied on billions of dollars in payments to partners like Apple, Samsung & AT&T - including $26.3 billion in 2021 alone - to ensure its search engine is enabled by default on most smartphones. Mehta ruled Google violated Section 2 of the Sherman Antitrust Act in two markets - general search services and general text advertising -- and found the default search engine deals "are exclusive and have anticompetitive effects." The DOJ is expected to ask Mehta to block Google from offering default deals in the future. Google shares fell more than 1% in after-hours trading Tuesday. A proposal to break up Google would be the first of its kind by the feds in more than 20 years. The DOJ won a major antitrust case against Microsoft but later abandoned a push to break up the company in 2001. The DOJ will outline its proposed remedies to tackle Google's monopoly during the second set of court proceedings related to the antitrust case, which are slated to kick off in September. Google declined to comment. The DOJ could not immediately be reached for comment. Google has already indicated that it plans to appeal Mehta's ruling. "This decision recognizes that Google offers the best search engine, but concludes that we shouldn't be allowed to make it easily available," the company's president of global affairs Kent Walker said in a statement last week.

Google lost a big antitrust lawsuit. Now it might get broken up

Google lost a consequential antitrust battle last week over the dominance of its search engine -- but it could be just the beginning of major upheaval at the tech giant. The Department of Justice is now weighing how to tackle Google's outsize position in search, The New York Times reports, citing unnamed sources with knowledge of the matter. Possible actions include requiring it to spin off certain parts of its businesses, including Chrome or its Android smartphone operating system; making its data available to competitors; or forcing the company to walk away from the pricey agreements it made with companies, such as Apple, that made Google's search engine the default. Google was sued by the Justice Department in 2020 for allegedly monopolizing search, pushing out competitors such as DuckDuckGo and Microsoft's Bing. A federal judge ruled in favor of the DOJ, concluding that Google monopolized the online search engine market. Google has said it plans to appeal the court's decision. This marked the first major tech antitrust lawsuit since U.S. v. Microsoft, a 1998 case that found Microsoft monopolized computer operating systems and ultimately led to the demise of Internet Explorer. Analysts at Wedbush, led by managing director and senior equity research analyst Dan Ives, said in a research note that a breakup of the company "would be a stretch" and that Google would certainly appeal -- which could be a years-long process. The Justice Department and Google have until Sept. 4 to come up with a process to reach a resolution, and a hearing is scheduled for Sept. 6 to plan next steps. The government's win against Google "was a huge notch on the belt for the DOJ and now Apple, Amazon, Meta and others will be the focus," Ives said. Apple was hit with a sweeping federal antitrust lawsuit in March, that accused the iPhone-maker of being anti-competitive and creating a monopoly over the smartphone market. Ives said this case will likely last for years, and a ultimately a settlement will likely be reached over the next 12 to 18 months. Consolidation in the tech industry is already on the rise, and is expected to continue to grow, fueled by the rise of artificial intelligence -- and the technologies that come with it. Despite heightened antitrust scrutiny within the tech industry, Ives said it's "highly unlikely" that this will lead to any significant breaking up of major players. He does, however, foresee that "business model tweaks and heavier scrutiny of M&A will be front and center."

U.S. Authorities Have Considered Breaking Up Google Just A Week After A Judge Ruled That The Search Engine Giant Is An Illegal Monopoly

Google has been declared an illegal monopoly by Judge Amit Mehta, with the search engine giant found to have violated antitrust law by spending billions of dollars to keep the competition at bay and become the biggest platform in the process. Just a week after this verdict, the U.S. Department of Justice has reportedly considered splitting Google into separate companies as the first step towards breaking the dominance of Big Tech. Sources familiar with the matter spoke with Bloomberg, informing them about the existing options. While breaking up Google is being considered by the authorities, other alternatives such as the company being forced to share data with rivals are also being explored. The Mountain View behemoth leverages its search engine reach to obtain an unfair advantage in several AI products, but the report mentions that there could be some plan in the pipeline to prevent such measures. Google's Android operating system was also in the crosshairs of the DOJ, with divesting the platform being considered as one of the remedies. Authorities were also considering attempting to force a possible sale of AdWords, which is Google's search ad program, and divestment of the Chrome web browser. For anything thinking that the technology giant is being singled out, antitrust watchdogs have targeted multi-billion-dollar entities such as Meta, Amazon, and Apple in the past, claiming that these companies have illegally monopolized the market. Microsoft was previously engaged in a skirmish with the DOJ in 2004 when it was claimed that the software titan was forcing Windows-powered computers to use its Internet Explorer browser. Google has also been found to be paying Apple billions to keep its search engine as the default one on various devices. It was reported through court documents that in 2021, the iPhone maker pocketed $26 billion thanks to this agreement. However, Apple executive Eddy Cue has stated that there is no search engine alternative to Google, while also mentioning that there is no price Microsoft could pay to get Apple to abandon its partnership.

US may seek Google breakup or data share after search monopolization ruling | AppleInsider

The US DOJ ruled Google is an illegal monopolist, which could result in breaking up the parent company Alphabet or requiring data sharing with rivals while undercutting Google Gemini's advantage. Google is a word synonymous with searching the web, and with good reason. It has dominated the space for decades and uses that dominant position to ensure competitors can never quite catch up. At least, that is the ruling from the United States Department of Justice. And, according to sources speaking to Bloomberg, a breakup may be needed. There are numerous points in time where Google could have reached monopoly status. Some say it's way back when people started using the word "Google" to mean search, while others look to the Alphabet rebrand in 2015. Either way, Google is massive. While Google Search and text search ads are the center of this problem, they aren't the only portions of the company under scrutiny. The anonymous sources suggest that Android could be a primary target for divestment from Alphabet. The operating system is licensed by the company but requires things like Chrome and Gmail to be pre-installed and un-deletable, for example. Alphabet also contains products like YouTube, Waze, and the new Google-made AI Gemini. It isn't clear exactly how far a breakup would go or which companies would go where, but a divestment of Android could include more than just the operating system. Another option could be requiring Google to provide access to its search data. The EU Digital Markets Act already requires this of Google, and a US requirement could be even more impactful for competitors. Of course, there's also the option of breaking up Alphabet and requiring search data shares. No official decisions have been made in the case. Whatever happens, it is clear that exclusive contracts like the one between Google and Apple won't be possible anymore. Which, in turn, has pushed Apple to search for more services revenue from sources like Patreon subscriptions.

US authorities considering breaking up Google - reports

Breaking off the Android operating system, AdWords, Google's search ad program, or the Chrome web browser are all options reportedly being discussed. The US Department of Justice is considering breaking up Google, according to reports from Bloomberg, the New York Times and others. Last week, a federal court in the US ruled the tech giant had broken antitrust law by spending billions on creating an illegal monopoly and becoming the world's default search engine. Read more: Google illegally maintained online search monopoly, US court rules The ruling is seen as the first big win for authorities taking on the dominance of Big Tech. The Department of Justice's other options include forcing Alphabet's Google to share data with competitors and instating measures to prevent it from gaining an unfair advantage in AI products, the reports said, citing people familiar with the matter. Read more from Sky News: Spectacular meteor shower makes sky glow Pregnant women urged to get vaccine Two astronauts stuck in space Breaking off the Android operating system, AdWords, Google's search ad program, or the Chrome web browser are all options being discussed, according to the reports. Meta, Amazon and Apple have all had legal action brought against them by antitrust regulators in the past four years for their domination of their markets. Microsoft had settled with the Department of Justice in 2004 on claims it forced its Internet Explorer Web browser on Windows users. Google and the Department of Justice did not immediately respond to requests for comment.

Google may have to give up Chrome, Android and AI data because of antitrust case result

The fallout of Google's antitrust lawsuit continues to produce dramatic-sounding potential consequences for the company, with new reporting suggesting Google may have to give up or share large parts of its business portfolio. Sources speaking to Bloomberg claim the U.S. Department of Justice is looking at possible remedies after a District court found Google to be monopolizing the search engine market. Some of those remedies could involve Google giving up Android, Chrome or Google AdWords (its advertising business), something that previous analyses have suggested. Supposedly the most likely solution to be chosen would involve banning Google from making search exclusivity deals with other companies, such as the one it had with Apple to be the iPhone's default search provider. But other ideas include allowing rival search engines access to AdWords or Google's data, letting rival AI services to use Google training data, or preventing Google from forcing websites to allow training data scraping in order to list them. Google is intending to appeal, but if the outcome stands, then the company could be fundamentally changed, even if most of the suggested remedies aren't carried out, and even if it takes a long time for the results of the remedies to appear. Android and Chrome are heavily tied to Google, and not just because it's the company that makes them. Using both to their full extent requires logging in with a Google account, and Google requires Android phone makers to agree to a set of terms to use the operating system, including installing default Google apps and making them hard or impossible to remove. The Department of Justice has ordered many company break-ups in the past, but it didn't succeed in breaking up Microsoft in the 1990s, the closest comparable case. All bets are off when it comes to the outcome of this case, so all we can do is wait for the DoJ to make its proposal to Judge Amit Mehta, the judge who ruled on the Google antitrust case, and then see how he and Google respond.

US DOJ might ask for breakup of Google, like spinning off Android and/or Chrome

After Google was found to have a monopoly over online search, the US Justice Department will next offer proposals to a judge on how to remedy the situation. New reports today detail how the DOJ might ask for a breakup of Google, specifically Android and/or Chrome. According to Bloomberg and the New York Times, several options are being considered. The most extreme and "frequently discussed" is a breakup of Google, with the "most likely units for divestment [being] the Android operating system and Google's web browser Chrome." At issue is how they contribute to online search dominance by having Google Search as the default engine. It's not clear if the government would want both or just one product from the reporting today. Regardless, following the merger in April, that would be the Platforms & Devices division, which also includes hardware teams working on Pixel. The end result might be Android and/or Chrome being spun off into its own company. Another divestiture candidate is Google Ads (AdWords text advertising in particular), or the government could ask for an "interoperability requirements that would make it work seamlessly on other search engines." Another option would require Google to divest or license its data to rivals, such as Microsoft's Bing or DuckDuckGo. Something less extreme, and likely, is a "ban on the type of exclusive contracts" that set the default search engine. Looking ahead at future competition, the government "might seek to stop the company from forcing websites to allow their content to be used for some of Google's AI products in order to appear in search results." These remedies are still being considered and nothing has been finalized. The government and Google, which plans to appeal, will be back in court this September.