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The US could end up breaking up Google over antitrust issues

Posted on by darion

The US DoJ could attempt to break Google into multiple smaller entities. The search giant’s parent company Alphabet may have to protect its assets and dominance over the online search and ads business.

Google loses a landmark case of antitrust and anti-competition

The US Justice Department had a surprising win against Google this month. US District Judge Amit Mehta reportedly observed, “Google’s ubiquitous search engine has been illegally exploiting its dominance to squash competition and stifle innovation.”

“After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly.”

“Google’s dominance in the search market is evidence of its monopoly. (The company) enjoys an 89.2% share of the market for general search services, which increases to 94.9% on mobile devices.”

Needless to say, this is a major setback for Google, or specifically speaking the business’ parent company Alphabet. Google has always stressed that consumers merely flocked to its search engine because it was exceptionally good.

Google had rubbished the claims it was monopolizing the online search business. Moreover, the business categorically denied it was stifling competition in the online ads market through questionable practices.

Will the US DoJ force Google break up?

It is painfully obvious that Alphabet would intensely challenge the verdict. Kent Walker, Google’s president of global affairs, has reportedly confirmed the company would appeal the judge’s findings. However, for now, things are not looking good.

The Justice Department lawyers successfully believe that Google’s business practices adversely affect the online search and ads business. Consequentially Google’s dominance, which could be termed as a monopoly, allowed the company to charge advertisers artificially high prices.

For several years, antitrust regulators at the Justice Department have openly voiced their concerns about Google’s stronghold over the search and ads industries. Moreover, claimed Google lawyers could have done a lot more to improve the quality of its search engine. Instead, the company spent billions of dollars to ensure Google Search was the default search engine on smartphones, tablets, and web browsers.

Such harsh arguments and observations could spell trouble for Google. Buoyed by the ruling, the DoJ could seek to break up Google. Specifically speaking, lawyers could demand Alphabet divest in some of its core businesses, just like the proposed breakup of TikTok.

If this happens, it would be the biggest breakup of an American company since AT&T was dismantled back in the 1980s. Realistically speaking, Google might be forced to make multiple significant changes to accommodate competition on its platforms. Perhaps, Alphabet might have to stop ensuring Google Search is the default search engine on certain platforms.

Needless to add, this is a lot easier said than done. For the time being, Judge Mehta has reportedly ordered both sides to begin plans for the second phase of the case.