The US Department of Justice (DoJ) is expected to ask a judge to force Google to divest one or more of its core products, including its Chrome browser and Android mobile operating system, among the potential remedies to curb its power over online search.
The request, which is due to be filed later on Wednesday, will largely follow a framework outlined in prosecutors’ initial proposal last month, according to a source familiar with discussions between the US states and the DoJ, which together brought the underlying lawsuit against Google.
In the initial proposal they set out a broad plan to compel 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. Google employs about 5,500 people in Ireland.
The “expansive solution” set to be put forward by the DoJ follows a ruling earlier this year by Judge Amit Mehta in Washington, DC, which found that Google had developed an illegal monopoly in online search by spending billions of dollars on exclusive deals with wireless carriers, browser developers and device manufacturers, in particular Apple.
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It will be up to the judge to ultimately decide what remedies to impose on Google. If adopted, the requested relief would be a landmark win for the DoJ’s antitrust unit, which under Jonathan Kanter has cracked down on anticompetitive conduct across the economy, with a particular focus on Big Tech.
The DoJ and states are also seeking to “provide pathways” for AI companies to enter the search market “with independence from Google” and “create commercial opportunities that are attractive [in order] to become the next generation of search companies”, the person said.
Prosecutors are also expected to ask the judge that Google stop paying partners such as Apple billions of dollars a year to make Google’s search engine the default on web browsers – contracts that sit at the core of the legal challenge. Google’s contracts totalled more than $26 billion (€24.6 billion) in 2021 alone, with about $20 billion of that going to Apple, helping to entrench Google as the default search engine on the popular mobile device.
A Google spokesperson declined to comment and referenced a blog post published last month that said the “blueprint goes well beyond the legal scope of the court’s decision about search distribution contracts”, and reiterated plans to appeal.
The DoJ declined to comment.
Alphabet, Google’s parent company, has vowed to appeal against the liability decision and will probably also fight the remedy ruling, which could extend the high-stakes and complex proceedings by years. The company, which handles more than 90 per cent of online queries, has argued that it faces tough competition in the sector and that its success was due to the quality of its products.
Google offers Chrome and its Android operating system for free, using them as loss-leaders to promote its search and connected advertising business, which generates the vast majority of its revenues.
If Google were eventually forced to divest Chrome, it would lose control of the world’s most widely used browser that accounts for almost two-thirds of the US market.
Its lawyers claim spinning off Chrome would harm consumers as few other companies have the capacity to invest the billions a year necessary to keep the browser secure and competitive with rivals, such as Apple’s Safari, while still providing it without cost.
Mehta is likely to rule on remedies by mid-2025. But the case – as well as the rest of the Biden administration’s antitrust crackdown on Big Tech – is entering a highly uncertain period as president-elect Donald Trump takes office in January and installs his own enforcers.
It is unclear whether the incoming administration will continue to pursue the same tough remedies as the current one, or whether it would take a more lenient approach to Google and other powerful tech companies.
Google’s case is one of several antitrust actions filed against Big Tech by US regulators in recent years. Apple, which has also been sued by the DoJ, appeared in a US federal court in New Jersey on Wednesday, where its lawyers argued that the judge should dismiss a lawsuit against the iPhone maker over its alleged monopolisation of the smartphone market.
Cases are also pending against Meta and Amazon, and antitrust regulators at the Federal Trade Commission plan to investigate Microsoft’s cloud business. – Copyright The Financial Times Limited 2024
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