Google Breakup A Possibility After Monopoly Ruling: Report (2024)

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.

Google Breakup A Possibility After Monopoly Ruling: Report (1)

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.

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Google Monopoly Case

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.

AT&T, Microsoft Set Precedents

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.

Phil Walker, CEO of Manhattan Beach, Calif.-based Google partner Network Solutions Provider, told CRN in an interview that he welcomes government regulation when it comes to protecting data privacy.

However, “the timing of government regulation could be too proactive” and stifle areas of innovation such as the emerging generative AI (GenAI) market.

“In the age of AI, we need innovation at a cost and scale," Walker said. "In this new age of change, we need to grow to keep pace with AI, robotics, and what comes next."

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.

U.S. antitrust cases against Amazon and Apple are also still on the horizon.

Google Breakup A Possibility After Monopoly Ruling: Report (2024)

FAQs

Google Breakup A Possibility After Monopoly Ruling: Report? ›

Then this week, reports said the government is considering requesting that Google break up in order to address the monopoly. shares have fallen 6% this month to $161.30 as of Thursday's close and are on pace for their worst monthly performance since February 2023, according to Dow Jones Market Data.

What would happen if Google was broken up? ›

“If you break up Google's search technology or make them change their AI website rules, it will still be challenging for others like an Apple or Microsoft to get up to the same speed as Google,” said the CEO. “So this would mean degrading the quality of search for years.

Is Google running a monopoly? ›

Google's tactics in the penalty phase of the Play Store case may foreshadow its strategy in a similar round of so-called “remedy hearings” that will be held in an even bigger antitrust case that resulted in a judge branding the dominant search engine as an illegal monopoly, too.

Why break up a monopoly? ›

A “break up" enhances competition among the suppliers of specialized equipment so that the manufacturing sector will benefit from a lower input price.

How has Google become and stayed a monopoly? ›

The court found that Google's business practices, such as paying billions to ensure it remains the default search engine on devices like Apple and Samsung products, were designed to stifle competition and maintain its dominant position — the definition of a monopoly.

Can we survive without Google? ›

Yes, it is possible to live in a world without Google. But it would probably be like using the Internet without the best search engine, best browser, and the worst part is there will be no android.

What would happen if Google didn't exist? ›

And without Google, we might be using an equally common (and much less interesting) phrase, like "search it up," when goading our friends to find Web-based answers on their own. Beyond the name, Google has also affected online and business culture, stressing simplicity and fun. For instance, you've likely seen Doodles.

Is Google a natural or legal monopoly? ›

Companies such as Meta (formerly Facebook), Google, and Amazon have built natural monopolies for various online services due in large part to first-mover advantages, network effects, and natural economies of scale involved with handling large quantities of data and information.

What company is almost a monopoly? ›

Market leaders like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN) that have penetrated a sector and captured a substantial portion of the market are deemed as some of the best monopoly stocks in that regard.

What company today is a monopoly? ›

Monopoly examples include various monopolistic businesses that exist in theory and practice. Examples of real-life monopolies include Luxottica, Microsoft, AB InBev, Google, Patents, AT&T, Facebook, and railways.

Does the US government break up monopolies? ›

By virtue of the Sherman Antitrust Act of 1890, the US government can take legal action to break up a monopoly. In 1902, President Theodore Roosevelt used the Sherman Antitrust Act as a basis for trying to break up the monopolization of railway service in the United States.

When was the last time a monopoly was broken up? ›

After eight years of litigation, AT&T in 1982 agreed to a Department of Justice consent decree that led to the breakup of AT&T into seven independent companies nicknamed the “Baby Bells.” This decision resulted in lower long-distance phone rates and increased competition in the telecommunications sector.

Is AT&T still a monopoly? ›

By the 1970s, AT&T's monopoly was under scrutiny. Competitors like MCI filed antitrust lawsuits, and the Department of Justice stepped in. The result was a landmark decision in 1984 to break up AT&T into seven regional Bell operating companies, commonly known as "Baby Bells."

Does Google have an unfair monopoly? ›

On Monday a US federal judge ruled Google has violated antitrust laws, saying the organisation “is a monopolist, and it has acted as one to maintain its monopoly”.

Is Google a monopoly in 2024? ›

Following a nine-week bench trial starting in September 2023 and closing arguments in May 2024, District of Columbia district court judge Amit Mehta ruled on August 5, 2024, that Google illegally maintained its monopoly in markets for general search services and general search text advertisements in violation of ...

Is Google getting sued for being a monopoly? ›

WASHINGTON, Aug 5 (Reuters) - A U.S. judge ruled on Monday that Google violated antitrust law, spending billions of dollars to create an illegal monopoly and become the world's default search engine, the first big win for federal authorities taking on Big Tech's market dominance.

What happens if you break Google? ›

Accounts may be suspended if we find violations of our policies or the Terms and Conditions. If we detect an egregious violation, your account will be suspended immediately and without prior warning.

What would happen if Google stopped working? ›

Alternative search engines would likely see a surge in popularity as people seek out new ways to find the information they need, but it's unlikely that any one company would be able to fully replace Google's search capabilities. Another major impact of a Google shutdown would be felt in the world of email.

What do you think will happen if there is no Google? ›

Everyone would be using another search engine like Bing or Yahoo, end of story. A world without Google would look pretty much the same. People would just use another search engine like Bing,DuckDuckGo,Yahoo,Altavista or Ask Jeeves.

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