The U.S. Justice Department is contemplating a historic breakup of Alphabet Inc.’s Google following a pivotal court ruling that declared the tech giant’s dominance in the online search market illegal. This potential action would mark the first substantial attempt by Washington to dismantle a major company for monopolistic practices since the failed Microsoft breakup effort two decades ago.
Government Weighs Options for Google’s Breakup
In addition to a potential breakup, which could involve splitting off Google’s Android operating system or Chrome browser, the Justice Department is exploring other remedies. These include mandating data sharing with competitors and imposing restrictions to prevent Google from leveraging its search dominance to gain an unfair edge in artificial intelligence (AI) technologies.
Market Impact and Future Moves
Alphabet’s shares dropped 3.8% in early trading on news of the ruling, reflecting investor concerns. The Justice Department is also considering measures to ban exclusive contracts that have been central to the case against Google. Judge Amit Mehta’s decision on August 5 found that Google’s exclusive agreements with device manufacturers prevent other search engines from competing effectively.
Focus on AI and Data Practices
The Justice Department’s scrutiny extends to Google’s AI practices. Attorneys have expressed concerns that Google’s dominance in search provides it with a competitive advantage in developing AI technologies. The potential remedies may include prohibiting Google from using website content for AI development without consent.
Historical Context and Next Steps
The potential breakup of Google would be the largest of a U.S. company since AT&T’s dismantling in the 1980s. Discussions also include the possibility of requiring Google to divest or license its extensive data to competitors, a move that aligns with recent European regulations aimed at increasing competition.
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