The U.S. Justice Department is exploring the possibility of breaking up Alphabet Inc.’s Google following a landmark court ruling that deemed the tech giant’s dominance in the online search market as monopolistic. This move marks Washington’s most significant antitrust intervention since the failed attempt to break up Microsoft Corp. two decades ago.
Potential Breakup or Alternative Remedies
The Justice Department’s deliberations could lead to a complete breakup of Google, with possible divestments including the Android operating system and the Chrome web browser. Alternatively, the department might impose less severe measures, such as requiring Google to share its data with competitors or restricting its advantages in AI technology.
Market Impact and Legal Proceedings
Following the August 5 ruling by Judge Amit Mehta, Alphabet’s shares plummeted by 3.8%, reflecting investor concerns about potential regulatory actions. The ruling found that Google had illegally monopolized the search and advertising markets. While Google plans to appeal the decision, the second phase of the case will involve government proposals aimed at restoring competition, which could include a breakup request.
Focus on Exclusive Contracts and Data Access
The Justice Department is also considering banning Google’s exclusive contracts that contributed to its monopoly. Additionally, discussions are ongoing about forcing Google to divest or license its data to rivals such as Microsoft’s Bing or DuckDuckGo. This move would address concerns that Google’s data dominance prevents effective competition.
AI and Data Privacy Concerns
The government is scrutinizing Google’s use of data for developing AI products. Reports indicate that Google’s practices give it undue advantages in AI, potentially harming competitors. The Justice Department may seek to limit Google’s ability to use content from websites for its AI products without proper consent.
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