For the first time in four decades since the breakup of AT&T into Baby Bells, the U.S. government is considering dismantling one of the largest monopolies in the world: Google.
In a court filing on Tuesday, the U.S. Department of Justice suggested it may recommend separating Google’s core businesses, which would involve splitting off its search operations from Android, Chrome, and the Google Play app store.
This move aims to prevent Google from leveraging its other products to favor its search services and related features, including emerging technologies like artificial intelligence.
This recommendation follows a federal judge’s ruling in August that found Google had violated U.S. antitrust laws, labeling it a “monopolist.”
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This decision could significantly impact Google’s fundamental business and how millions of Americans access information online.
In response, Google described the government’s potential actions as “radical” in a blog post, arguing that it could degrade user experience by destabilizing Android and Chrome, stifle AI innovation, and compel the company to share personal data with competitors, thereby compromising user privacy.
“This case is about a series of search distribution contracts,” the company stated in its blog post. “Instead of focusing on that, the government appears to be pursuing a broad agenda that could affect multiple industries and products, leading to significant unintended consequences for consumers, businesses, and American competitiveness.”
Shares of Google (GOOG) fell 1.9% in early trading on Wednesday before recovering slightly, even as major indexes rose.
The U.S. government contended that Google employed various interconnected strategies and products to eliminate competition in search, resulting in limited choices and reduced innovation in search engines.
The case focuses on the exclusive contracts Google has invested billions in to become the default search provider on devices like smartphones and web browsers, particularly through partnerships with companies like Apple. U.S. District Judge Amit Mehta ruled that these agreements were anticompetitive.
With the court confirming that Google violated the law, the next phase involves determining the penalties the company will face. This stage is underway, even as Google plans to appeal Judge Mehta’s ruling.
The entire process, including the appeal, could take months or even years to resolve.
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The Justice Department may seek specific penalties against Google, including a potential ban on its exclusivity agreements, which could significantly impact smartphone users by ending its long-standing partnership with Apple.
Additionally, the DOJ might request that the judge require a “choice screen” on electronic devices, allowing consumers to select their preferred search engine at setup instead of having Apple or Google set the default. Such choice screens are already common in markets like the European Union.
The government may also aim to prevent Google from promoting its search engine within its other products.
For instance, it could propose a rule to stop Chrome from routing searches through Google by default, a practice known as self-preferencing that has attracted increasing scrutiny from U.S. policymakers.
Furthermore, the DOJ is considering how Google’s dominance in search could provide an unfair advantage in artificial intelligence, given the vast amounts of data required to train advanced AI models.
The government is weighing penalties that would allow websites to opt out of having their content used for Google’s AI training or included in AI-generated summaries of search results. Prosecutors might even seek to compel Google to share the software models that power its AI-assisted search features with competitors.
“Google’s ability to utilize its monopoly power to enhance its artificial intelligence features poses an emerging barrier to competition and threatens to solidify Google’s dominance,” the filing stated.
This case has been labeled the largest tech antitrust confrontation since the U.S. government’s antitrust battle with Microsoft at the turn of the millennium.
When announcing its intention to appeal Judge Mehta’s decision in August, Google reiterated its argument from court, asserting that its search engine remains the most popular among consumers because it offers the best quality.
“As this process unfolds, we will continue to focus on creating products that people find helpful and easy to use,” said Kent Walker, Google’s president of global affairs, in a post on X.
The outcome for Google could influence potential remedies in other ongoing antitrust cases against major tech companies.
Google is also facing a separate case brought by DOJ attorneys and 17 states, alleging that its advertising practices are anticompetitive.
Additionally, Amazon, Apple, Meta, and Ticketmaster are involved in their own antitrust legal challenges.
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