US considers rare antitrust move: Breaking up Google
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A forced breakup of Google would be the biggest of a US company since AT&T was dismantled in the 1980s.
PHOTO: REUTERS
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Washington - A rare bid to break up Alphabet’s Google is one of the options being considered by the US Department of Justice (DOJ) after a landmark court ruling
The move would be Washington’s first push to dismantle a company for illegal monopolisation since unsuccessful efforts to break up Microsoft two decades ago. Less severe options include forcing Google to share more data with competitors 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 conversations.
Regardless, the government will likely seek a ban on the type of exclusive contracts that were at the centre of its case against Google.
A forced breakup of Google would be the biggest of a US company since AT&T was dismantled in the 1980s.
If the DOJ pushes ahead with a break-up plan, the most likely units for divestment are the Android operating system and Google’s web browser Chrome, said the people. Officials are also looking at trying to force a possible sale of AdWords, the platform the company uses to sell text advertising, one of the people said.
The DOJ discussions have intensified in the wake of Judge Amit Mehta’s Aug 5 ruling that Google illegally monopolised the markets of online search and search text ads. Google has said it will appeal that decision, but Judge Mehta has ordered both sides to begin plans for the second phase of the case, which will involve the government’s proposals for restoring competition, including a possible break-up request.
A Google spokesman declined to comment on the possible remedy. A DOJ spokeswoman also declined to comment.
The US plan will need to be accepted by Judge Mehta, who would direct the company to comply.
DOJ attorneys, who have been consulting with companies affected by Google’s practices, have raised concerns in their discussions that the company’s search dominance gives it advantages in developing AI technology, the people said. As part of a remedy, the government might seek to stop the company from forcing websites to allow their content to be used for some of Google’s AI products in order to appear in search results.
Break-up
Divesting the Android operating system, used on about 2.5 billion devices worldwide, is one of the remedies that has been most frequently discussed by DOJ attorneys, according to the people. In his decision, Judge Mehta found that Google requires device makers to sign agreements to gain access to its apps like Gmail and the Google Play Store.
Those agreements also require that Google’s search widget and Chrome browser be installed on devices in such a way they cannot be deleted, effectively preventing other search engines from competing, he found.
Google paid as much as US$26 billion (S$34 billion) to companies to make its search engine the default on devices and in web browsers, with US$20 billion of that going to Apple.
Judge Mehta’s ruling also found Google monopolised the advertisements that appear at the top of a search results page to draw users to websites, known as search text ads.
Those are sold via Google Ads, which was rebranded from AdWords in 2018 and offers marketers a way to run ads against certain search keywords related to their business. About two-thirds of Google’s total revenue comes from search ads, amounting to more than US$100 billion in 2020, according to testimony from 2023’s trial.
If the DOJ does not call for Google to sell off AdWords, it could ask for interoperability requirements that would make it work seamlessly on other search engines, the people said.
Data access
Another option would require Google to divest or license its data to rivals, such as Microsoft’s Bing or DuckDuckGo. Judge Mehta’s ruling found that Google’s contracts ensure not only that its search engine gets the most user data – 16 times as much as its next closest competitor – but that data stream also keeps its rivals from improving their search results and competing effectively.
Europe’s recently enacted digital gatekeeper rules imposed a similar requirement that Google make available some of its data to third-party search engines. The company has said publicly that sharing data can pose user privacy concerns, so it makes available only information on searches that meet certain thresholds.
AI products
For years, websites have allowed Google’s web crawler access to ensure they appear in the company’s search results. But more recently, some of that data has been used to help Google develop its AI.
In autumn 2023, Google created a tool to allow websites to block scraping for AI, after companies complained. But that opt-out does not apply to everything.
In May, Google announced that some searches will now come with “AI Overviews”, narrative responses that spare people the task of clicking through various links. The AI-powered panel appears underneath queries, presenting summarised information drawn from Google search results from across the web.
Google does not allow website publishers to opt-out of appearing in AI Overviews, since those are a “feature” of search, not a separate product. Websites can block Google from using snippets, but that applies to both search and the AI Overviews. BLOOMBERG
