The US Department of Justice has said in a new lawsuit that it may recommend a breakup of Google (GOOG, GOOGL) as an antidote to unhealthy competition in the search engine market, showing how far Washington is willing to go to rein in Big Tech to keep. .
DOJ attorneys used a 32-page document to outline a framework of options that DC District Court Judge Amit Mehta should consider, including “behavioral and structural solutions that would stop Google from producing products like Chrome, Play and Android to use to benefit Google Search. “
Google said in a blog post that “DOJ’s radical and sweeping proposals risk harming consumers, businesses and developers.”
The stock fell slightly in pre-market trading on Wednesday.
The proposal is the Justice Department’s first move to break up a tech empire since it tried to do so with Microsoft (MSFT) more than two decades ago.
That case — which the DOJ referenced in its Tuesday lawsuit — resulted in a 2002 settlement that opened the door to broader competition in the Internet browser software market.
DOJ’s move also sends a signal to other tech giants currently facing antitrust suits from DOJ and other regulators in Washington, part of a broad effort by the Biden administration to crack down on what it sees as anticompetitive behavior in a number of industries. to keep in check.
The government has already alleged anti-competitive behavior against tech giants Apple (AAPL) and Amazon (AMZN), claiming that Microsoft’s acquisition of gaming giant Activision Blizzard would create a monopoly in the gaming market.
The case against Google, which focused on its dominance in search, resulted in a landmark decision in August, with DC District Court Judge Amit Mehta siding with DOJ and concluding that Google illegally controlled the market for online search engines and monopolized the search text advertising market.
Mehta concluded that Google’s agreements with browser providers and devices powered by Google’s Android operating system prevented rivals from entering and growing in the markets.
It is now up to Mehta to decide what to do next in a separate ‘remedies’ phase of the process, likely to begin in 2025.
DOJ is expected to provide a more detailed document outlining these solutions by November 20. But the 32-page document filed late Tuesday offers several takeaways beyond forcing Google to sell parts of its business.
One has to do with contracts that protect Google’s search engine as the default on Internet browsers and Internet-connected devices that use Google’s Android operating system.
Google pays as much as $26 billion a year to maintain its position on mobile devices such as Apple (AAPL) and Samsung smartphones.
Justice Department attorneys say that to prevent further harm, they may seek to limit or end Google’s use of contracts that use Chrome, Play and Android to favor Google Search, as well as “other arrangements for revenue sharing related to search and search-related products’. possibly with or without the use of a selection screen.”
The DOJ could also ask the judge to force Google to share the data it uses to refine its search algorithms with competing browsers and search engines, and limit the company’s dominance over search text ads.
DOJ suggested that the judge should also consider blocking Google from illegally monopolizing related markets, in addition to the search and search text advertising markets.
It could ask a judge to force Google to give websites more options to opt out of “any artificial intelligence product owned by Google.”
Google has reversed the DOJ’s suggestions.
“We believe today’s blueprint goes far beyond the legal scope of the Court’s decision on search distribution contracts,” Lee-Anne Mulholland, Google’s vice president of Regulatory Affairs, wrote in a blog post.
Google has promised to appeal. And Judge Mehta could delay orders to change Google’s behavior while Google challenges his ruling in the D.C. Circuit Court of Appeals.
The judge would lose the right to impose legal remedies if it turns out that Google did not violate the law on appeal.
And even if Google fails and is ordered to change its conduct, Judge Mehta can later modify his orders to better ensure competition is restored.
Google faces antitrust challenges on other fronts. It is currently defending itself in a separate lawsuit from DOJ, claiming it has a monopoly on the technology used to sell online ads.
And earlier this week, another federal judge ordered Google to open its app store as part of the resolution of a lawsuit brought by Epic Games Inc.
DOJ cited that ruling in its Tuesday lawsuit that outlined Google’s breakup as a possible remedy, noting that the judge in the Epic Games case said remedies should create “a bridge to the moat” to combat network effects .
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