After last week’s historic sentence, Google could be forced to separate its assets into different companies.
Last week, a landmark judicial case found Google to be a monopolist and initiated a long legal battle to bring down the giant’s power. Google will likely appeal the ruling, meaning it will take months or years to reach a definitive sentence.
Judge Amit P. Mehta scheduled a hearing on September 6th to discuss the next steps. The Justice Department has until September 4th to come up with a proposal.
The ruling found Google liable for using its monopolistic position to undermine smaller rivals. Google paid billions of dollars to companies like Apple, Android, and Mozilla Firefox to have Chrome as the default search engine. According to the sentence, these payments were illegal.
Google will face another ruling - this time related to its advertisement segment - in September. In 2023, Google made $306 billion from ads, while search engine revenues amounted to $175 billion.
Net profits for fiscal 2023 amounted to $73.8 billion.
Small competitors such as DuckDuckGo, a search engine that claims to have better privacy settings than Chrome, were said to be hurt by Google’s actions. “Truly fixing the entrenched competitive imbalance that Google’s default advantage has afforded them will require a mixture of interventions,” DuckDuckGo said in a statement.
Possible sanctions
The Department of Justice (DOJ) hasn’t revealed which direction its decision will go yet. “The Justice Department is evaluating the court’s decision,” a spokesman said, “no decisions have been made at this time.”
However, past rulings on big tech giants point to the possible sanctions the Department will issue.
The most worrying for Google executives will be a forced split of the company’s assets. This would involve separating Chrome and Android into different companies, one related to search engines and the other to software.
Although a split up is the most extreme option, it wouldn’t be unprecedented. In 2000, a similar antitrust ruling forced Microsoft to split its assets up. The decision was later reversed in the appeal sentence, though other measures were upheld.
According to The New York Times, the 2000 Microsoft antitrust case helped smaller companies, including Google at the time, to innovate and gain a fair market position.
Other possible measures could force Google to divest its advertisement business or include statements about better alternatives in the Chrome search engine.
The US Department of Justice began a series of probes to challenge the dominance of big tech companies. Separate antitrust investigations were opened against Apple and Meta, mirroring similar moves by the European Union.
