On August 14, Bloomberg reported — citing unnamed sources “with knowledge of the deliberations” — that the U.S. Justice Department is considering breaking up Alphabet Inc.’s Google following a recent court ruling that found the tech giant guilty of monopolizing the online search market. This potential move would mark the first attempt to dismantle a company for illegal monopolization since the unsuccessful efforts against Microsoft two decades ago.
According to Bloomberg’s sources, the Justice Department is exploring several options to address Google’s market dominance. While breaking up the company is the most extreme measure under consideration, other possibilities include forcing Google to share more data with competitors and implementing safeguards to prevent unfair advantages in AI products.
The Bloomberg article says that if a breakup plan moves forward, the most likely candidates for divestment are the Android operating system and the Chrome web browser. The Justice Department is also apparently examining the possibility of forcing a sale of AdWords, Google’s platform for selling text advertising.
The discussions within the Justice Department have intensified following Judge Amit Mehta’s August 5 ruling, Bloomberg notes. The judge found that Google illegally monopolized the markets for online search and search text ads. While Google plans to appeal, both parties have been ordered to begin planning for the next phase of the case, which will involve proposals for restoring competition.
Bloomberg’s report highlights that any plan put forth by the U.S. government would need to be approved by Judge Mehta, who would then direct Google to comply. If a forced breakup were to occur, it would be the most significant dismantling of a U.S. company since AT&T in the 1980s.
The Bloomberg article also mentions that Justice Department attorneys have raised concerns about Google’s search dominance giving it advantages in developing artificial intelligence technology. As part of a potential remedy, the government might seek to prevent Google from forcing websites to allow their content to be used for some of Google’s AI products in order to appear in search results.
As of 5:30 p.m. UTC on August 14, Alphabet class A shares (NASDAQ: GOOGL) were trading at $159.31, down nearly 3% on the day.
Source: Google Finance
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