US Antitrust Officials Consider Google Breakup As ‘Trustbusting Era’ May Return

The US Department of Justice and a group of states submitted a document detailing a proposed remedy framework in the ongoing antitrust case against big tech giant Google. The case centers around Google’s violations of Section 2 of the Sherman Act for illegally maintaining monopolies, including general search services and text advertising. 

On Aug. 5, US District Judge Amit Mehta, Washington, DC, ruled that Google violated antitrust law by spending billions of dollars to create an illegal monopoly as the world’s default search engine on smartphones, computers, and tablets. The ruling paved the way for antitrust enforcers to submit a 32-page document on Tuesday that explained the potential remedies for the judge to consider as the case moves into the remedy phase. 

On page 9 of the remedy framework document, the DoJ specifies the government has a “full range of tools previously identified such as structural and additional behavioral remedies as well as term extensions” to restore competition in the marketplace that would modify Google’s business from using products such as its Chrome browser or Android operating system to create advantages for the big tech firm’s search engine. 

“Fully remedying these harms requires not only ending Google’s control of distribution today, but also ensuring Google cannot control the distribution of tomorrow,” DoJ said. 

Antitrust enforcers said Google colluded with other big tech companies to make its search engine the default option on devices. 

Google quickly responded in a blog post titled “DOJ’s radical and sweeping proposals risk hurting consumers, businesses, and developers” to the remedy framework document on Tuesday evening.

Google Vice President of Regulatory Affairs Lee-Anne Mulholland wrote in the post that the DoJ’s remedy framework is “radical” and could have “negative unintended consequences for American innovation and America’s consumers.”

Google’s market capitalization (as of Tuesday’s close) of just a little over $2 trillion makes it the world’s fourth-largest company. Mounting legal pressure sent shares down around 1% in premarket trading in New York. 

Antitrust pressure has been building, with multiple cases being pushed against Google. It also faces the threat of breakup in a separate government lawsuit centered around its online advertising business. 

Across the Atlantic, European Union watchdogs have voiced similar concerns with antitrust enforcers in the US about the need to break up Google’s businesses. EU competition chief Margrethe Vestager recently said that “divestiture is the only way” to settle these worries with the big tech firm. 

Daniel Ives, managing director and senior equity analyst at Wedbush Securities, commented on Google’s potential breakup, indicating it’s “unlikely at this point despite the antitrust swirls,” adding, “Google will battle this in the courts for years.”

There has been a four-decade lull in the government breaking up major companies. The last major one came with the 1984 breakup of AT&T. Before that, the 20th century was considered the ‘trustbusting era’, with Standard Oil, American Tobacco, and a railroad trust known as Northern Securities forced to spit up by the government.