Yesterday, government lawyers told the court that they are studying the breakup of Google as one of the possible remedies to Alphabet's (GOOGL.O) internet search monopoly. However, the breakup was only mentioned lightly, and most of the 10-page document discussed the final remedy that the government may propose to District of Columbia Federal Court Judge Amit Mehta on November 20, mainly restrictions on Google's business practices. Judge Mehta ruled in August that Google constituted a search monopoly by paying mobile phone manufacturers and web browser developers to set Google as the default search engine. He will make a ruling on the remedy in August next year.
Despite headlines warning of a structural threat to Google, references to traditional antitrust action in the filing were limited to brief discussions of separating Google’s search business from its Chrome browser, Android operating system or Play app store, with specific details remaining unclear.
“It’s just speculation at this point,” said Rebecca Haw Allensworth, an antitrust professor at Vanderbilt University Law School. “This document is about giving the government more discretion in what they ultimately request.”
Alphabet's stock price, which has not faced a split like Standard Oil or AT&T (T.N), fell only slightly, 1.5%, to $161.86.
"We believe structural change resulting from this case is an unlikely outcome for Google and expect any material impact to be concentrated in the search distribution business," Wedbush analyst Dan Ives wrote.
Rory Van Loo, a Boston University law professor, is one of a group of antitrust scholars who believe courts should consider breaking up tech giants like Alphabet. He points out that the oil and telecommunications industries prospered after their monopolies were broken up, and that shareholders enjoyed good returns.
“Defendants always warn that a split would have disastrous consequences,” Van Loo said. “But if the facts of the case justify it, the judge should not hesitate to order a split.”
The Biden administration’s antitrust leadership holds a similar view. On Tuesday, the “remediation framework” submitted by the Department of Justice and state attorneys general mentioned that Google’s internal search index, distribution network, user data, artificial intelligence and advertiser network are intertwined, forming an anti-competitive “moat.”
They argue that remedies for Google's platform must "cross the moat," a reference to a ruling Monday by San Francisco federal court Judge James Donato, who ordered Google to open its Android app store to mobile app developers such as Epic Games within three years. Google is appealing.
Not surprisingly, Google said the government's remedies would spell disaster. Lee-Anne Mulholland, Google's vice president of regulatory affairs, said breaking up Chrome or Android would make them "break down." She also said smartphones are cheaper because Google gives Chrome and Android away for free. Other Justice Department proposals - such as forcing Google to share user search data with competitors - would threaten user privacy.
However, whether Google should be broken up and whether Judge Mehta will do so in this antitrust case are two different matters.
“This judge is not going to do that,” predicted Haw Allensworth of Vanderbilt University, noting that the Justice Department, in a separate case filed in federal court in Alexandria, Virginia, has accused Google of monopolizing the online advertising market through its bundling of ad technology products.
The two district judges cannot coordinate their remedies, so they are unlikely to issue conflicting split orders.
"If you're going to break up Google, are you really going to break it up twice?" Haw Allensworth asked. "Shouldn't we be thinking about the company as a whole?"
Article forwarded from: Jinshi Data