Google faces potential breakup as DOJ outlines monopoly remedies

Google has opposed the proposals

Google may no longer be allowed to pay for positioning on popular devices Credit: Getty Images

The US Department of Justice (DOJ) has hinted at the possibility of forcing Alphabet's Google to divest parts of its business as a remedy to address its dominance in the search engine market.

Following a court ruling in August that declared Google a monopolist, DOJ lawyers have proposed various solutions to restore competition and curb the company's anti-competitive practices.

The DOJ outlined the remedies in its 32-page court filing [pdf] on Tuesday.

These options range from imposing consent decrees to monitor the company's behaviour to forcing Google to divest parts of its business, including Chrome, Android, or Google Play.

The DOJ's primary concern is Google's control over search distribution and the preferential treatment it receives on platforms like Apple's iPhone. The department argues that Google's monopoly power allows it to pay exorbitant fees to be the default search engine, making it difficult for competitors to gain a foothold.

To address this issue, Google may be required to stop paying billions of dollars to secure its search engine as the default on popular devices.

The DOJ is also considering measures such as requiring Google to provide educational campaigns to help users make informed choices about their search engines. Additionally, the department is exploring options to limit Google's ability to use Chrome, Play, and Android to favour its own search services over rivals.

"Plaintiffs are considering behavioral and structural remedies that would prevent Google from using products such as Chrome, Play, and Android to advantage Google search and Google search-related products and features — including emerging search access points and features, such as artificial intelligence — over rivals or new entrants," the DOJ filing states.

Google has opposed the proposals.

In a blog post, the company argued that the remedies go beyond the scope of the recent court ruling and could harm consumers.

"This case is about a set of search distribution contracts. Rather than focus on that, the government seems to be pursuing a sweeping agenda that will impact numerous industries and products, with significant unintended consequences for consumers, businesses, and American competitiveness," Google said.

"The DOJ's outline also comes at a time when competition in how people find information is blooming, with all sorts of new entrants emerging and new technologies like AI transforming the industry," it added.

Google argues that Chrome and Android play an important role in providing free access to the internet for billions of people, and that breaking up these businesses could have negative consequences for users.

The DOJ is expected to submit a more detailed proposal outlining its proposed remedies to the court by 20th November 2024.

Google ordered to open App Store to rivals

In a separate antitrust case, a US judge this week issued a permanent injunction that will require Google to offer alternatives to its Google Play store for downloading apps on Android phones.

The ruling follows a jury verdict last year in favour of "Fortnite" creator Epic Games, which found Google guilty of engaging in anti-competitive practices.

The judge's injunction requires Google to open up its Play Store to greater competition, allowing users to download apps from rival sources. Additionally, the search giant will be prohibited from restricting in-app payment methods for three years. The order also restricts Google's ability to preinstall its app store on Android devices and limits its revenue sharing with other app distributors.

Google has announced its intention to appeal the verdict and seek a pause of the injunction pending appeal. The company argues that the changes mandated by the judge will have unintended consequences that could harm consumers, developers, and device makers.

Epic Games, the maker of "Fortnite," has welcomed the ruling, stating that it will lead to a more vibrant and competitive Android ecosystem. The company plans to launch its Epic Games Store on Google Play in 2025.

Google last week issued a warning to New Zealand lawmakers, stating that it will cease linking news content on its search engine, news platform, and Discover service if the country passes a law requiring digital platforms to pay publishers for linking to news articles.

The "Fair Digital News Bargaining Bill," currently under consideration in New Zealand, aims to address the power imbalance between news publishers and large tech companies. The bill would allow news publishers to negotiate fees with digital platforms that use their content.

Google is opposing the bill, arguing that the proposed "link tax" is fundamentally unworkable and goes against the principles of a free and open internet.