Wall Street’s optimism that President Donald Trump would adopt a lenient approach in the ongoing antitrust case against Google-parent Alphabet (GOOGL) has diminished. This shift follows the Justice Department’s renewed call for a company break-up, influencing Google stock to trend slightly lower.
DOJ renews antitrust push against Google, demands Chrome divestment
On Friday afternoon, the Department of Justice (DOJ) reiterated its demand for Google to divest its web browser, Chrome. This proposal follows similar requests made by the Biden administration last year, which included the sell-off of Chrome and an end to internet search-related payments to Apple (AAPL) as part of legal remedies in the antitrust case.
In its latest filing, the DOJ emphasized that Google’s “illegal conduct has created an economic goliath, one that wreaks havoc over the marketplace to ensure that — no matter what occurs — Google always wins.” Federal judge Amit Mehta had previously ruled in August that Alphabet unlawfully maintained a monopoly over online search services, inhibiting competitors from developing their products.
Judge Mehta is expected to hold oral arguments concerning the proposed remedies in April and issue a ruling by early August.
Ongoing antitrust challenges for Google
Simultaneously, another antitrust lawsuit against Google, focusing on its dominance in the digital ad market, is proceeding. The DOJ describes this case as the “DoubleClick trial,” stemming from Google’s 2008 acquisition of the digital advertising firm for $3.1 billion. A ruling on this case is anticipated in the spring.
The current DOJ filing demands the divestiture of Chrome, underscoring the continuity of efforts to dismantle Google’s search monopoly. Additionally, the DOJ aims to terminate agreements that establish Google as the default search engine across various devices, advocating for enhanced market competition and consumer choice.
The DOJ has made it clear that Google must “promptly and fully divest Chrome, along with any assets or services necessary to successfully complete the divestiture,” under the terms approved by the court and plaintiffs.
In August, Judge Mehta’s ruling indicated that Google had maintained a search monopoly by compensating web browsers and smartphone manufacturers to feature its search engine. Evidence presented during the 2023 trial estimated Google spent $26.3 billion on such arrangements in 2021 alone. Judge Mehta noted that approximately 70% of US search queries occur through platforms where Google is the default search engine, making it challenging for smaller competitors to gain traction.
The DOJ also seeks to prohibit Google from engaging in paid agreements with companies like Apple and Mozilla to secure its default search engine status. Moreover, the DOJ is requesting that Google allows rival search engines to display its results and access its data for a decade.
In a revision from prior proposals, the DOJ has opted not to demand that Google divest its artificial intelligence products but now requires the company to notify federal and state officials before making further investments in AI. Google plans to appeal Judge Mehta’s ruling and submitted its own proposal, asserting minimal changes are necessary. The company proposes allowing continued payments for prime placement but with agreements permitting other search engines to compete for visibility on smartphones and web browsers.
Google spokesperson Peter Schottenfels remarked that the government’s proposals would adversely affect consumers, the economy, and national security. Kent Walker, Google’s chief legal officer, previously termed the DOJ’s proposals as a “radical interventionist agenda” that risks compromising the security and privacy of many Americans while stifling innovation.
Arguments regarding the conflicting proposals are scheduled to be heard by Judge Mehta in April, yet Google has already indicated intentions to appeal any decision reached, signaling the beginning of what could be a protracted legal battle.
Featured image credit: Mitchell Luo/Unsplash
