Google
faces US government attempt to break it up
Department
of Justice examining ‘structural remedies’ to challenge tech corporation’s
internet search monopoly
Jack Simpson
Wed 9 Oct
2024 07.38 EDT
The US
government may ask a judge to force the breakup of Google’s business as it
attempts to challenge the tech corporation’s monopoly over the internet search
market.
The
Department of Justice has filed court papers that say it is considering
enforcing “structural remedies” that would prevent Google from using some of
its products such as Chrome, Android and Play, which the DoJ argues give the
company an advantage over rivals.
Other
actions being considered include blocking Google from paying to have its search
engine pre-installed on smartphones and other devices.
Google,
which is owned by Alphabet, said it would challenge any case by the DoJ and
that the proposals marked an “overreach” by the government that would harm
consumers.
The latest
filing comes after a court ruling in August in favour of the DoJ that found
Google, which controls 90% of the global search market, had violated antitrust
laws and spent billions building up an illegal monopoly. The ruling paved the
way for the current lawsuit by the justice department that will rule on
potential actions to counteract Google’s market domination.
The filing
said Google’s conduct had resulted in “interlocking and pernicious harms” to
users, and the importance of restoring competition to a market, which was
“indispensable” to Americans, could not be overstated.
The judgment
said: “Plaintiffs are considering behavioural 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 –
including emerging search access points and features, such as artificial
intelligence –over rivals or new entrants.”
The move may
also prevent Google from being able to pay major phone companies such as Apple
and Samsung for Chrome to be the default browser on their devices. In 2021,
Google paid companies $26.3bn to ensure its search engine was the default
option in the products.
The filing
said: “For more than a decade, Google has controlled the most popular
distribution channels, leaving rivals with little to no incentive to compete
for users. Fully remedying these harms requires not only ending Google’s
control of distribution today, but also ensuring Google cannot control the
distribution of tomorrow.”
Lee-Anne
Mulholland, Google’s vice-president for regulatory affairs, said the DoJ’s
“radical and sweeping” proposals risked hurting consumers, businesses and
developers.
She said:
“This case is about a set of search distribution contracts. Rather than focus
on that, the government seems to be pursuing a sweeping agenda that will impact
numerous industries and products, with significant unintended consequences for
consumers, businesses and American competitiveness.”
Ben
Barringer, a technology analyst at Quilter Cheviot, said that while the filing
was a “shot across the bow” of Google, he was sceptical about the immediate
impact the move would have on the company and said it would be a “drawn-out
process” with lots of negotiation.
He said: “It
has cast the net fairly wide in its list of potential remedies but for now the
detail remains incredibly shallow.
“The share
price was unmoved on the news, as the proposed range of remedies was in line
with fears.”
The case has
echoes of the US government’s attempt to break up the fellow tech company
Microsoft in the 1990s in an effort to challenge its dominance over the nascent
software market.
In 2000, a
judge ruled in favour of the DoJ and said the company would have to be split in
two but this was successfully appealed against by Microsoft a year later and
the justice department eventually dropped its case.
The DoJ is
expected to submit a more detailed set of proposals by 20 November, with Google
to submit its proposed remedies by 20 December.
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