Has the Time for the Break-up of Google Arrived?

Breaking up a Tech Titan is no longer taboo. The world’s biggest search engine, Google, may potentially be dismantled as the United States Justice Department pushes forward with a major antitrust case.

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 and Google search-related products and features”[1], as mentioned in a court filing in October.

The Ruling

This recommendation follows the ruling of a federal judge in August that Google monopolized the search engine market through illegal commercial deals, thereby violating US antitrust law. The possible breakup is expected to be an antitrust remedy necessary to “prevent and restrain monopoly maintenance could include contract requirements and prohibitions; non-discrimination product requirements; data and interoperability requirements; and structural requirements”[2].

The case focused on Google’s exclusive contracts with other tech companies such as Apple, which enable it the default search engine on smartphones and web browsers. US District Judge Amit Mehta found those deals anticompetitive.

With the aim to bring an end to “Google’s control of distribution today”[3] and to make sure it “cannot control the distribution tomorrow”[4], the decision facilitated a series of changes to Google’s most traditional and significant business, as well as the way which information is transmitted to millions of Americans.

Nonetheless, as Xiaofeng Wang, principal analyst at tech consultants Forrester stated, regulatory change as the sole approach is insufficient if the purpose is to narrow Google’s grip on the search market. Eventual success will be dependent on “technology innovations and consumer adoption strategies, including marketing”[5].

Google, in response, described the government’s potential approach as “radical”[6]. Not only could it impede AI innovation, but it could also undermine customers’ privacy by forcing the company to share personal information with competitors. Lee-Anne Mulholland, the vice president of regulatory affairs of Google, said that the government failed to focus on the fact that this case is “about a set of search distribution contracts”, but seemingly attempting to pursue “a sweeping agenda that will impact numerous industries and products, with significant unintended consequences for consumers, businesses, and American competitiveness”[7].

What Follows?

Should a breakup of the tech titan be ordered as a result of Google’s looming antitrust case in the US, the demand for competition lawyers for both defending Google or supporting government’s claims will certainly surge. Nevertheless, a breakup is rather unlikely. Instead, it is more likely for the court to require Google to eliminate certain exclusive deals. This would lead to seismic changes for smartphone users, including the end of the long-established agreement with Apple. In particular, the court filing claimed that “Google’s ability to leverage its monopoly power to feed artificial intelligence features is an emerging barrier to competition and risks further entrenching Google’s dominance.”

The US Justice Department’s call for splitting up is likely welcomed by the European Commission, as it is arriving at the final stages of investigating into Google’s advertising technology businesses after touting a split-up order since last year. Alec Burnside, a partner at Dechert who has acted for companies complaining about Google, noted that “for years it’s been the practical reality that the EU was never going to address a breakup order to an American company when the American agencies themselves were not minded to move in that direction”[8]. He continued that “a great war of words, a breakdown of good relations, and possibly even some search for retaliatory measures”[9] has been risked by EU officials. The U.S. government offering a divestment option “fairly clearly provides political cover for them if they do choose to pursue a breakup,” [10]Thomas Vinje from Clifford Chance who has also represented companies against Google, suggested.

Conclusion

A more detailed proposal is to be published this month, followed by the process of assembling additional documents and evidence from Google in aid of the two-week remedies hearing in April.

The outcome will set the stage for potential remedies in other ongoing antitrust cases against tech titans. Meanwhile, Google is facing another antitrust case regarding its advertising business. Amazon, Apple, and Meta are also coping with antitrust legal battles.

[1] https://edition.cnn.com/2024/10/09/tech/us-government-considers-a-breakup-of-google/index.html

[2] https://storage.courtlistener.com/recap/gov.uscourts.dcd.223205/gov.uscourts.dcd.223205.1052.0_1.pdf

[3] ibid.

[4] ibid.

[5] https://www.bbc.co.uk/news/articles/c62504lv00do

[6] https://blog.google/outreach-initiatives/public-policy/doj-search-remedies-framework/

[7] ibid.

[8] https://www.politico.eu/article/google-breakup-eu-political-cover-big-tech/

[9] ibid.

[10] ibid.