U.S. Assistant Attorney General Jonathan Kanter speaks about the antitrust lawsuit against Live Nation Entertainment during a press conference as Attorney General Merrick Garland and Deputy Attorney General Lisa O. Monaco look on during a press conference at the Department of Justice in Washington, U.S., May 23, 2024. REUTERS/Ken Cedeno
Ken Cedeno | Reuters
The Department of Justice late Tuesday made recommendations for Google’s search engine business practices, indicating that it was considering a possible breakup of the tech giant as an antitrust remedy.
The remedies necessary to “prevent and restrain monopoly maintenance could include contract requirements and prohibitions; non-discrimination product requirements; data and interoperability requirements; and structural requirements,” the department said in a filing.
The DOJ also said it was “considering behavioral 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.”
Additionally, the DOJ suggested limiting or prohibiting default agreements and “other revenue-sharing arrangements related to search and search-related products.” That would include Google’s search position agreements withApple’siPhone and Samsung devices — deals that cost the companybillions of dollarsa year in payouts. The agency suggested one way to do this is requiring a “choice screen,” which could allow users to pick from other search engines.
Such remedies would end “Google’s control of distribution today” and ensure “Google cannot control the distribution of tomorrow.”
The recommendations come after a U.S. judge in August ruled that Google holds a monopoly in the search market. That ruling came after the government in 2020 filed thelandmark casealleging that Google has kept its share of the general search market by creating strong barriers to entry and a feedback loop that sustained its dominance. The court found that Google violated Section 2 of the Sherman Act, which outlaws monopolies.
Kent Walker, Google’s president of global affairs, said the company plans to appeal the ruling and highlighted the court’s emphasis on the high quality of Google’s search products, which the judge also noted in his ruling.
The DOJ also recommended Google make available to competitors its data within its search index and models, including its AI-assisted search features and its ad ranking data. The DOJ is also considering remedies that would “prohibit Google from using or retraining data that cannot be effectively shared with others on the basis of privacy concerns,” according to the filing.
The recommendations are still far from being decided.
Judge Amit Mehta said he’ll aim to rule on the remedies by August 2025 and an appeal by Google would likely draw out any final impact potentially years.
In response to the Tuesday filing, Google’s vice president of regulatory affairs, Lee-Anne Mulholland, called the DOJ’s recommendations “radical.”
“This case is about a set of search distribution contracts,” Mulholland said in a blog post. “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.”
She added that “splitting off Chrome or Android would break them — and many other things.”
The most likely outcomeaccording to some legal experts, is that the court will ask Google to do away with certain exclusive agreements such that it has with Apple. The court may suggest that Google make it easier for users to try other search engines, experts told CNBC. However, a breakup seems less likely, the experts said.
In thesecond quarter“Google Search & Other” accounted for $48.5 billion in revenue, or 57% of Alphabet’s total revenue. The company holds 90% of search market share.
In a separate antitrust case this week, a U.S. judge issued a permanent injunction that will force Google to offer alternatives to its Google Play store for downloading apps on Android phones.
A judge in September wrapped a trial for another antitrust case brought on by the DOJ — though this one homed in on Google’s ad tech business.