Google (GOOG, GOOGL) is about to find out what the Justice Department says needs to be done to dismantle the tech giant’s dominance of the online search market.
Prosecutors are expected to file a document outlining possible remedies in federal court as early as Tuesday after successfully arguing in a landmark lawsuit that Google acted as an illegal monopoly.
It will be up to Judge Amit Mehta of the District of Columbia District Court, who sided with the DOJ’s monopoly argument, to decide what to do next in a separate “remedies” phase of the trial likely in 2025 will start.
Possible solutions range from an outright breakup of Google, to making its search engine data available to competitors, to ending agreements that secure the search engine as the default on mobile devices and Internet browsers.
“I think coming up with a preliminary injunction will be more complicated than finding liability,” said antitrust attorney Carl Hittinger.
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.
A break
Certainly, a breakup of Google’s empire – the rarest of antitrust measures – has the most potential to reorder the technology universe.
That could include divestitures of the Android operating system, the Chrome browser, or the AdWords platform, all of which drive users to Google Search.
Any of the three solutions would take away a multi-billion dollar revenue stream from the tech giant, plus cut off the data that powers the broader search and advertising ecosystem.
Legal experts disagree on whether this will actually happen. Hittinger said that is unlikely because Judge Mehta must choose a remedy that best serves the public interest.
“You can’t just rip away the American audience that uses Google’s service, which is now ingrained in our culture, without replacement,” Hittinger said. “Unless other competitors have a platform that is the same or better than Google, what should the public use in the meantime?”
A divestiture of Google’s Android could impact devices beyond those installed on devices used for web search.
Peloton, for example, uses the open source system to power its training equipment. Airplane manufacturers use it to power video screens, and supermarkets use it to run their consumer kiosks.
Developers also rely on Google to maintain Android’s ability to work across platforms.
Hittinger expects Judge Mehta to craft a remedy similar to the one imposed against Xerox (XRX) in 1975 to end its dominance of the office copier market.
The company was no longer allowed to configure its copiers so that suppliers of ink cartridges and other third-party components could not work on its machines.
But Bill Baer, former attorney general of the Justice Department’s antitrust division, said he could foresee Judge Mehta ordering Google to divest Android or Chrome.
“For this remedy to make sense, the judge will have to do something that allows competition to flourish,” Baer said.
“Because they are a monopolist, they charge advertisers, who in turn charge us, much more than they would if the market were competitive.”
Exclusive contracts
A likely scenario, antitrust attorneys say, is that the judge will end agreements that secure 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.
Proskauer antitrust attorney Colin Kass said he suspects Judge Mehta is particularly receptive to remedies overturning these contracts because their anticompetitive effects were at the heart of the ruling.
“This was a relatively limited complaint and an even more limited ruling,” Kass said.
Representatives of Apple and other companies that benefit from the contracts have said they chose Google because of the quality of its search engine. Competing evidence from the DOJ showed that Microsoft’s Bing search engine attracted more users to the Edge browser when Google was not the default option.
An end to these revenue sharing contracts would have significant consequences for Google and Apple.
The contracts – which require Apple to install Google Search as default in its Safari browser, Spotlight Search and Siri – are estimated to generate more than $20 billion annually for Apple.
Targeted search platforms like Yelp (YELP) and Amazon (AMZN) could also benefit if fewer search users are automatically directed to Google.
Tim McGinn, an antitrust litigator at Gunster, said device makers and browser services can choose Google as the default even if a court blocks Google from standard placement agreements.
Furthermore, he said, it is possible that the court could still allow Google to secure default search placements, but under new, non-exclusive contracts that would not raise antitrust concerns.
If Google can no longer achieve standard placement, it may also be necessary to give consumers a choice of search engine.
McGinn predicted that the DOJ would require mobile devices, browsers and wireless carriers to give consumers a choice between search engines.
“It’s possible that we’ll eventually see more phones and browsers pre-programmed to use a different search engine,” says McGinn.
Last year, the European Union’s antitrust regulator, the European Commission, required Google to provide a choice screen based on its determination that the lack of choice violated its antitrust laws.
Share data with rivals
The DOJ could also ask the judge to force Google to share its “click and search data” with competing browsers and search engines, which it uses to refine its search algorithms.
Specifically, the data includes Google’s intellectual property that tracks and learns information from search engine users who type into the search field and the links they choose by clicking on search results.
Rival US search engines include Microsoft (MSFT) Bing, Yahoo Search and DuckDuckGo. International search engines include Russia’s Yandex and China’s Bidau.
A spokesperson for DuckDuckGo told Yahoo Finance before the lawsuit that the company hoped the case would result in Google having to share its click and search data.
The data could help more privacy-focused browsers like DuckDuckGo and search engines compete with Google.
The spokesperson said it may be more difficult for DuckDuckGo to attract advertisers because, unlike Google, it does not build users’ search profiles or search histories and then use that data to target users with ads.
Another remedy that some legal experts expect to be on the DOJ’s list is for Google to temporarily open up its Internet index data to competing browser providers, such as Microsoft’s Edge, Apple’s Safari, Mozilla’s Firefox, Brave and Opera.
AI
Even if Google were forced to spin off search-related entities, or unravel default placement contracts, these moves may not have a dramatic effect on the company, according to Jefferies senior analyst Brent Thill.
The bigger threats, according to Thill, come from new AI-powered search engines and rival Meta’s recent gains in attracting advertisers.
“I don’t think retiring a browser or an Android operating system will have a dramatic impact on the company,” Thill said.
However, Judge Mehta may need to consider how solutions to restore competition in the traditional search engine market could impact competition in the emerging AI-assisted search market.
One concern, legal experts say, is that Google’s search dominance could unfairly consolidate its position in the market for the next generation of searches.
At the same time, these new threats could work to Google’s advantage in the remedies process, allowing Google to argue that its overall search dominance is already under threat.
“If a violation is found, Google will say the market is already fixing itself,” said William Kovacic, former chairman of the U.S. Federal Trade Commission and professor of antitrust law at George Washington University.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.
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