Google could be forced to break up as the Justice Department begins procedures in that direction.
A statement by the US Department of Justice (DOJ) may spell the end of Google as we know it in the future. The Justice Department’s statement shows a major attitude change toward big tech companies, leaving the usual “laissez-faire” approach behind.
In the statement, the DOJ essentially opened the door for a break up of Google, one of the world’s largest companies with almost $2 trillion in market evaluation.
What will follow is a specific step-by-step procedure leading to a final ruling. In essence, a break up “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,” the government said in its court filing.
The ruling will come in relation to a sentence by a federal judge that found Google guilty of monopolistic actions, preventing a free and healthy competition. In the ruling, DC Federal Judge Amit Mehta said Google illegally monopolized the search engine market, taking advantage of its market share to prevent smaller competitors from entering the industry.
Specifically, the sentence found Google paid billions of dollars to hardware manufacturers to use Google Chrome as the default search engine. Mehta found these payments violated antitrust laws.
Google promised to appeal Mehta’s decision. A victory in appeal would prevent the DOJ from breaking up Google unless another, similar case is presented to the court and wins.
“This is going to take time,” former FTC commissioner Mozelle Thompson told Yahoo Finance. “Breakups are hard to do,” he added, “it’s an unusual remedy, and it doesn’t occur very often.”
Turnback to the 2000s
The DOJ’s decision to split Google into different entities mirrors a similar attempt against Microsoft in the early 2000s.
At the time, Microsoft was the world’s largest company. A ruling from a federal judge found Microsoft’s actions were jeopardizing competition in the personal computer market. In April 2000, a DC court ordered the break up of Microsoft, a decision later reversed in appeal.
Eventually, in November 2002 Microsoft signed a deal with the federal government, opening up its operating system and allowing smaller companies to access the market. According to several experts, that decision helped the subsequent tech innovation that turned some start-ups, including Google, into trillion-dollar companies.
The DOJ’s recent attacks against big tech seem a turnback to the early 2000s. It also mirrors a similar aggressive posture by the European Commission. Google recently won an appeal against the European Commission, overturning a previous €1.49 billion fine.
Nevertheless, the legal battles on both sides of the Atlantic continue for big tech companies.
