On November 21 local time, Google's stock price fell 4.74%, hitting a new closing low since November, with a total market value evaporating approximately $102.2 billion compared to the previous trading day, exceeding 700 billion RMB.
In the news, the U.S. Department of Justice, along with multiple state governments and other plaintiffs, officially submitted several proposed documents to a federal court in Washington, D.C., suggesting that the defendant Google be required to divest its Chrome browser business and not to abandon the splitting of the Android system, in order to weaken Google's monopolistic position in the internet search market.
Google's breakup crisis
The proposals also include prohibiting Google from entering into exclusive agreements with smart device manufacturers such as Apple, no longer allowing Google to pay billions of dollars annually in exchange for manufacturers setting Google's search engine as the default search engine; prohibiting Google from acquiring or investing in competitors in its search engine field, query-based AI products, or advertising technology companies; and requiring Google to sell search results and information to competitors for ten consecutive years, with a five-year ban on re-entering the browser market.
In early August of this year, Judge Amit Mehta of the federal district court presiding over the federal and state government lawsuit against Google ruled that Google illegally monopolized the internet search market, violating federal antitrust laws. The judge ordered the plaintiffs to submit proposals to correct Google's monopolistic behavior by the 20th of this month, and Google must submit relevant rectification proposals by December 20. Google's parent company stated that it would appeal the August ruling.
For Google, selling Chrome would be one of the worst penalties in its business development; this browser was launched in 2008 and is the most popular browser in the world, bar none. According to data from tech market research firm Statcounter, Chrome holds 67% of the global browser market share.
The Chrome browser is very important to Google's core advertising business. Alphabet, Google's parent company, reported that for the third quarter of 2024, as of September 30, the revenue from search advertising during the reporting period was $49.4 billion, accounting for three-quarters of the total sales of advertising business for that quarter.
This is also the most aggressive attempt at a breakup against tech companies by the U.S. Department of Justice since reaching a settlement with Microsoft over antitrust cases in 2001.
Trump: Will not split Google
It is worth mentioning that as early as October 2020, the Trump administration's Department of Justice filed an antitrust lawsuit against Google. Subsequently, the Biden administration's antitrust investigation escalated, initiating a series of antitrust lawsuits against Google's parent company Alphabet, Amazon, and Apple, aimed at curbing the overwhelming market influence of tech giants.
But the market expects that Trump may not be as proactive in implementing antitrust regulations during his second term. Previously, Trump stated in a public interview that he would not seek to split Google like Biden but would make changes to make Google's competitiveness 'fairer'.
The U.S. government has launched investigations into several giant companies and initiated breakups.
In 1969, the U.S. government began investigating IBM and formally filed a lawsuit in 1975. The U.S. government pointed out that IBM's practice of offering discounted prices to customers was considered predatory pricing, and the company's vertical integration from hardware and software to support departments was essentially monopolistic expansion. Although the two sides ultimately reached a settlement in 1982, allowing IBM to escape the fate of breakup, they also had to abandon their previous competitive strategy and were forced to hand over personal computer operating systems and processors to external companies.
In 2001, the main character of the antitrust lawsuit became Microsoft. Although Microsoft ultimately succeeded in its appeal, overturning the district judge's breakup ruling, Gates also resigned as CEO due to this lawsuit.
Looking back over the past century, there are not many American corporate giants that have been split due to antitrust actions.
In 1911, Rockefeller's Standard Oil Company was split into 34 companies, leading to the collapse of the oil empire; now ExxonMobil is one of them. In 1945, Alcoa was forcibly broken up after eight years of litigation, ending the aluminum trust, and now U.S. Aluminum is one of them. The last industry giant to be broken up by the U.S. government was AT&T. In 1984, telecom giant AT&T was split into eight subsidiaries (one long-distance phone company and seven regional phone companies) after 12 years of litigation, thus exiting the stage.
