By hannover-web.com The U.S. Department of Justice has hinted at the possibility of splitting Google to address its monopoly in the online search market. According to the Mercury News, the federal government is considering this drastic measure to curb Google’s dominance. However, analysts suggest that a complete breakup of the company into smaller entities is unlikely.
In August, a federal court officially deemed Google to have engaged in illegal monopolistic practices in the online search arena, highlighting that the changes made by the company were deemed “too aggressive” and harmful to both consumers and other businesses.
In a recent filing to the federal court in Washington D.C., the Justice Department indicated that it is contemplating “behavioral and structural remedies” to prevent Google from leveraging products such as its Chrome browser, Play app store, and Android operating system to create an unfair competitive edge for its search engine and related services.
The Justice Department stated that Google’s anti-competitive actions have allowed the company to profit unlawfully, inflicting “harmful damage” on the lives of all Americans.
Cristina Caffarra, an economist tracking the case from the Center for Economic Policy Research, remarked that while the Justice Department did not explicitly demand a breakup, the documentation “suggests separating these divisions from Google.”
In response to the Justice Department’s implications, Google issued a statement on its blog, claiming that isolating Chrome or Android would damage these systems and many related aspects.
Google further explained, “Separating these systems would alter their business models, increase device costs, and weaken their competitive stance against Apple’s ecosystem. Additionally, many software developers and device manufacturers rely on our systems, and changes would impact numerous businesses and users dependent on these platforms.”
Daniel Ives, a tech analyst at Wedbush Securities, noted that the Justice Department’s filing indicates a broad approach in seeking potential remedies during the legal proceedings, suggesting that a compromise with Google might ultimately be reached.
Ives described the situation as “a pure poker game,” asserting that Google is prepared to fight the Justice Department in court. He believes that Google will eventually have to adjust its business model and make concessions.
Nevertheless, Wedbush Securities’ analysis concludes that the likelihood of Google being broken up is less than 5%. Ives pointed out that since the antitrust lawsuits were launched, Google’s stock price has only seen a moderate decline, indicating that Wall Street investors are not inclined towards a breakup of the tech giant.
