Is USA truly considering breaking up Google following ruling on unlawful search market monopoly?

A U.S. judge ruled last week that Google violated antitrust law, spending billions of dollars to create an illegal monopoly and become the world's default search engine. Although the legal battle is expected to continue, Bloomberg reports that the U.S. Justice Department is now considering a rare antitrust move – breaking up Google. 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.

As Reuters reports, the ruling paves the way for a second trial to determine potential fixes, possibly including a breakup of Google parent Alphabet (GOOGL.O), which would change the landscape of the online advertising world that Google has dominated for years.

According to Bloomberg, the Justice Department is now considering forcing Google to sell AdWords, the platform the company uses to sell text advertising. Other options include obliging Google to share data with the competition, such as Microsoft’s web browser Bing, or to sell them licenses, as well as to introduce fair trading measures for their AI products.

One of said measures allegedly considered by the Justice Department includes divesting the Android operating system and Google’s web browser Chrome. Furthermore, Google’s exclusive contracts, which violate the anti-monopoly laws in this case, are likely to be banned.

Both Google and the Justice Department declined to comment.

If the American authorities truly order the breakup of Google, it would be the biggest breakup of a U.S. company since AT&T was dismantled in 1984, the media report.

Ruling praised by White House too

Last week’s ruling says that Google, which controls about 90% of the online search market and 95% on smartphones, is a monopolist and that it has acted as one to maintain its monopoly. The historic ruling, as it has been called, is the first big win for federal authorities taking on Big Tech's market dominance.

U.S. Attorney General Merrick Garland called the ruling "a historic win for the American people,” adding that "no company - no matter how large or influential - is above the law."

U.S. District Judge Amit Mehta, Washington, D.C., noted that Google had paid USD 26.3 billion in 2021 alone to ensure that its search engine is the default on smartphones and browsers, and to keep its dominant market share.

– The default is extremely valuable real estate. Even if a new entrant were positioned from a quality standpoint to bid for the default when an agreement expires, such a firm could compete only if it were prepared to pay partners upwards of billions of dollars in revenue share and make them whole for any revenue shortfalls resulting from the change – Mehta wrote.

White House praised the ruling, calling it a victory for the American people.

– As President Biden and Vice President Harris have long said, Americans deserve an internet that is free, fair, and open for competition – White House press secretary Karine Jean-Pierre said.

Google said in a statement that it planned to appeal the decision, and that Mehta’s opinion recognized Google as the internet’s best search engine — an argument the company had made in court as the reason consumers preferred Google over the competition.

– This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available – Google said in a statement.

Reuters reports that shares of Alphabet fell 4.5% on Monday amid a broad decline in tech shares as the wider stock market cratered on recession fears. Google advertising was 77% of Alphabet's total sales in 2023.

In the past four years, federal antitrust regulators have also sued Meta Platforms (META.O), Amazon.com (AMZN.O) and Apple (AAPL.O), claiming the companies have illegally maintained monopolies. Those cases all began under the administration of former President Donald Trump, Reuters reports.

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