Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The US government is considering asking a district judge to break up Google for its antitrust violations in online search, in what would mark federal prosecutors’ boldest effort yet to rein in one of the world’s most powerful tech companies.
The US Department of Justice is “considering behavioural and structural remedies that would prevent Google from using products such as [the] Chrome [browser], Play [app store] and Android [operating system]” to give its search engine an edge over competitors or new entrants, according to a court document filed on Tuesday.
Prosecutors could also seek to force Google to share users’ search data with rivals and restrict its ability to use search results to train new generative artificial intelligence models and products.
“For more than a decade, Google has controlled the most popular distribution channels, leaving rivals with little-to-no incentive to compete for users,” the DoJ said. “Fully remedying these harms requires not only ending Google’s control of distribution today, but also ensuring Google cannot control the distribution of tomorrow.”
The DoJ identified four areas that its remedies framework needed to address: search distribution and revenue sharing; generation and display of search results; advertising scale and monetisation; and gathering and use of data.
Google hit back at the proposals, calling them “radical and sweeping”, beyond the scope of the legal issues in the case and a threat to “consumers, businesses and American competitiveness”.
Shares of parent company Alphabet were little changed in after-hours trading and have risen 19 per cent this year to give it a market value of $2tn, the fourth largest for a listed company in the world.
The DoJ’s 32-page filing is its initial remedy proposal, which is subject to change. It comes after Amit Mehta, the judge presiding over the case, in August labelled Google a “monopolist” when he ruled that the company had spent tens of billions of dollars on exclusive deals to maintain an illegal dominance over search.
Tuesday’s filing advances the trial’s second phase, in which Mehta will determine the remedies to be imposed on Google.
The DoJ and Google are set to file their proposed final judgments and witness lists on November 20 and December 20, respectively. Mehta has set hearings for the remedy requests in April and has said he aims to hand down a decision by August 2025. Google has vowed to appeal against the decision as far as the US Supreme Court, which could take years longer.
In addition to potential spin-offs, prosecutors said remedies could include banning the exclusive contracts at the heart of the case — in particular the $20bn that Google pays Apple each year to be its default search engine — as well as imposing “non-discrimination” measures on Google products such as its Android operating system and Play app store.
The DoJ is also considering requiring Google to share its vast trove of data gathered to improve search ranking models, indices and advertising algorithms, which prosecutors argue was accumulated unlawfully.
To address any data privacy concerns that result, Google could be “prohibit[ed] from using or retaining data that cannot be effectively shared with others”.
The DoJ also recognised the disruptive impact that AI would have on online search. Prosecutors are concerned that Google will “leverage its monopoly power” to feed its AI features and want websites to be able to opt out of being used to train Google’s AI models or inclusion in its AI-generated summaries.
Finally, the filing said Google’s dominance over search text ads needed to be addressed by lowering barriers to would-be rivals or licensing its ad feed to others, independently from search results.
The Google case could potentially be the biggest antitrust victory for the DoJ since a judge ordered the break-up of Microsoft 24 years ago for illegally squashing competition.
However, that ruling was overturned on appeal a year later, making the Google lawsuit a second chance for the DoJ to fundamentally dismantle a Big Tech company’s dominance of a key sector.
The remedy trial’s outcome will be a critical test for Jonathan Kanter, who inherited the case and has ushered in a tougher enforcement policy in the past three years as head of the DoJ’s antitrust unit.
Kanter has sued Apple and has a second case against Google’s ad tech business in progress. Big Tech critic Lina Khan, chair of the Federal Trade Commission, has challenged Amazon and Meta in separate cases.
The filing comes close on the heels of other legal defeats for Alphabet. A California judge on Monday ordered the company to open its Android operating system to rivals, allowing them to create their own app marketplaces and payment systems to compete with Google Play. Google said it would appeal against the verdict.
That judgment was the result of a lawsuit from Epic, maker of the popular video game Fortnite, which argued that Google had suppressed competition in Android apps and used its monopoly to charge excessive fees.
Read the full article here