A proposal to break up Alphabet-owned Google is one of the options being considered by the Justice Department following a landmark court ruling that the company has monopolised the online search market.
According to Bloomberg, the move would be Washington’s first attempt to break up a company for illegal monopolisation since the failed attempt to break up Microsoft two decades ago.
Less serious options include forcing Google to share more data with rivals and measures to prevent it from gaining an unfair advantage in artificial intelligence products, said the people, who asked not to be identified discussing private talks.
Alphabet’s shares fell 3.8% as of 10:13 a.m. in New York yesterday, the biggest drop since August 5, when a federal judge ruled the company had an illegal monopoly in the search market.
Android and Chrome could be divested if there is no fragmentation
Regardless, the government is almost certain to seek a ban on the specific types of contracts at the heart of its case against Google.
If the Justice Department insists on a break-up plan, the units most likely to be divested are the Android operating system and Google’s Chrome web browser, officials said.
Officials are also considering forcing a possible sale of the AdWords platform, which the company uses to sell text ads.
Google has said it will appeal the 5 August ruling, but Mehta ordered both sides to begin planning for the second phase of the case, which will include the government’s proposals to restore competition, including a possible motion to dismiss.
The US plan will have to be accepted by Mehta, who will order the company to comply with it. A forced break-up of Google would be the largest break-up of a US company since the break-up of AT&T in the 1980s.
Justice Department lawyers advising companies affected by Google’s practices have expressed concern in interviews that the company’s dominance in search gives it an advantage in developing artificial intelligence technology.
As part of the solution, the government may try to stop the company from forcing websites to allow their content to be used for some of Google’s artificial intelligence products in order to appear in search results.
Google to sign consent decrees for Gmail and Play Store
Divestment of the Android operating system, which is used on some 2.5 billion devices worldwide, is one of the most frequently discussed remedies by Justice Department lawyers. In his ruling, Mehta found that Google requires device makers to sign agreements to provide access to its applications, such as Gmail and the Google Play Store.
These agreements also require Google’s search widget and Chrome browser to be permanently installed on devices, effectively preventing other search engines from competing.
Mehta’s ruling follows a December jury verdict in California that found the company had monopolised the distribution of Android apps. The judge in that case has not yet ruled.
The Federal Trade Commission, which also enforces antitrust laws, filed a brief in the case this week, saying in a statement that Google should not be allowed to “reap the rewards of unlawful monopolisation”.
Google has paid companies up to $26 billion to make its search engine the default on devices and web browsers, including $20 billion to Apple.
Google’s huge advertising revenues also in the crosshairs
Mehta’s ruling also revealed that Google has a monopoly on so-called search text ads, which appear at the top of search results pages to attract users to websites.
These ads are sold through Google Ads, which was renamed AdWords in 2018, and allows marketers to run ads for specific search terms related to their business.
According to testimony at last year’s hearing, about two-thirds of Google’s total revenue comes from search advertising, and will exceed $100 billion by 2020.
If the Justice Department does not require Google to sell AdWords, it may require interoperability requirements that would allow it to run smoothly on other search engines, the people said.
Google could be forced to share more data
Another option would be to require Google to transfer or licence its data to competitors such as Microsoft’s Bing or DuckDuckGo.
According to Mehta, Google’s contracts not only ensure that the search engine receives the most user data (16 times more than its nearest competitor), but this influx of data also prevents its rivals from improving their search results and competing effectively.
Recently introduced digital gatekeeping rules in Europe imposed a similar requirement on Google to make some of its data available to third party search engines. The company has publicly stated that sharing data could raise privacy concerns for users, so it only provides information on searches that meet certain thresholds.
Requiring monopolists to give competitors some access to technology has been a remedy in previous cases. In the first case brought by the Justice Department against AT&T in 1956, the company was required to grant royalty-free licences to its patents.
In the antitrust case against Microsoft, the settlement required the technology giant to make some of its applications, called application programming interfaces or APIs, available to third parties for free.
APIs are used to enable software programs to communicate and exchange data effectively.
Google uses data to develop artificial intelligence
For years, websites have given Google’s web crawler access to ensure they appear in the company’s search results. But recently, some of that data has been used to help Google improve its artificial intelligence.
Last autumn, Google created a tool that allows websites to block scraping for AI, after companies complained.
But this opt-out doesn’t apply to everything. In May, Google announced that some searches will now come with ‘AI overviews’, narrative answers that save people the trouble of clicking through various links. The AI-powered panel appears below queries and provides summarised information from Google search results across the web.
Google does not allow website publishers to opt out of appearing in AI Overviews because it is a ‘feature’ of search, not a separate product. Sites can opt out of Google’s use of snippets, but this applies to both search and AI Overviews.
A snippet is a piece of source code that does not work on its own, but is used as a shortcut in code.
