US Government Considers Breaking Up Alphabet Amid Antitrust Concerns
The U.S. government is contemplating a legal order for Alphabet Inc., Google’s parent company, to separate its operations.
This potential action follows a recent court ruling in which a judge determined that Google has unlawfully monopolized its market.
Outlined in a 32-page court document for the judge’s review as the case progresses, various remedies have been suggested. These may require Alphabet to divest certain business segments, including its Chrome web browser and Android operating system, as well as to cease financial arrangements that ensure its search engine is pre-installed or designated as the default on new devices.
Google has labeled these proposals as “extreme” and argued that they go beyond the legal issues directly associated with the case.
Additionally, the Department of Justice may seek a ruling that obliges Alphabet to share the indices, data, and algorithms it uses for its search engine and AI-driven features with its competitors.
These proposed remedies are still open to modification, and the Department of Justice plans to provide a more comprehensive proposal next month.
The Department stated: “For over ten years, Google has dominated key distribution channels, resulting in minimal competition from rivals. Addressing these issues requires not just the cessation of Google’s current distribution control but also preventing Google from monopolizing future distribution channels.”
In after-hours trading, Alphabet’s shares showed little fluctuation. Over the year, the company’s stock has increased nearly 20%, propelling its market valuation to $2 trillion.
In an August ruling, Judge Amit P. Mehta determined that Google, which manages approximately 90% of global online searches, leveraged its leading position to eliminate competition. He noted that Google spent $26.3 billion in 2021 to preserve its dominant status by ensuring its search engine remained the default on mobile devices and web browsers.
Mehta remarked that a new competitor would struggle to secure default status without being prepared to share billions in revenue with partners, making competition nearly impossible.
He emphasized that a loss of default statuses could have significant financial repercussions for Google, predicting that losing the Safari default would lead to a major decline in search queries and revenue.
Timeline of Google’s Antitrust Litigation
Oct 20, 2020: The U.S. Justice Department initiates a lawsuit against Google for allegedly monopolizing the online search and advertising sectors, marking a significant move against a major technology firm.
Sept 12, 2023: Google contests the antitrust allegations in court, asserting that its success stems from delivering superior services.
Nov 16, 2023: Sundar Pichai, CEO of Google, acknowledges the strategic importance of having the company’s search engine set as the default on mobile devices.
May 2, 2024: Judge Mehta examines closing arguments, questioning Google’s strategies for competing with rival search engines and the potential for advertisers to favor social media over search ads.
Aug 5, 2024: The judge rules that Google violated antitrust laws, stating that “Google has no true competitor.”
Oct 8, 2024: Prosecutors submit a detailed proposal recommending “behavioral and structural” remedies, including divesting parts of its business such as Chrome, Android, or Google Play.
Oct 9, 2024: Google argues that the proposed framework exceeds the legal confines of the court’s decision, warning that separating Chrome or Android could render them nonfunctional.
Nov 20, 2024: Prosecutors are set to file a specific order proposing the exact remedies they seek.
Dec 20, 2024: Google plans to put forward its own set of proposed remedies.
April 22, 2025: Judge Mehta will oversee a two-week trial to determine appropriate remedies.
August 2025: Judge Mehta is expected to deliver a ruling regarding potential remedies by the end of summer.
September 2025: Google will have a 30-day window from the ultimate judgment in the case to initiate an appeal, a process likely to extend into 2027 or later.
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