Google could be busted by the DOJ after its antitrust loss

Justice Department may consider breaking up Google (GOOGLE), after a federal judge ruled in August that the tech giant monopolized the online search engine market.

To address Google’s monopoly, the Justice Department said in a file in court Tuesday that it will find remedies to prevent and curtail any present and future maintenance of its dominance in the search market.

This would include “behavioral and structural remedies that would prevent Google from using products like Chrome, Play and Android to benefit Google search and Google search-related products and features – including access points and emerging search features such as artificial intelligence – over rivals or new entrants,” the agency said.

Other restrictions include limiting or prohibiting default agreements, pre-installation agreements and other revenue sharing arrangements related to its search and search products.

The DOJ sued Google in 2020 because it monopolized digital search, pushing out competitors. In his ruling, federal judge Amit Mehta said Google’s exclusive deals with companies like Apple it allowed him to raise prices for advertisers with no return.

Mehta wrote “there is no evidence that any rival constrains Google’s pricing decisions” and that those unconstrained pricing decisions “fueled Google’s dramatic revenue growth and allowed it to maintain high and remarkably stable operating profits.” The judge noted that nearly 90% of all search queries went through Google in 2020.

This was the first major US technology antitrust lawsuit against Microsoft (MSFT), a 1998 case that found Microsoft monopolized computer operating systems and ultimately led to the demise of Internet Explorer. This case has been mentioned a lot in recent legal filings given its similarities to the Google process.

Artificial intelligence is also an area of ​​concern for the DOJ, which is “likely to become an important feature of the evolving search industry,” particularly given Google’s ability to shut out competitors using its existing muscle in the search industry.

“Google’s ability to leverage its monopoly power to power artificial intelligence functions is a developing barrier to competition and risks further strengthening Google’s dominance,” the agency said.

While AI won’t be a replacement for search, the DOJ said it’s trying to ensure that any limits it imposes on Google also prevent it from establishing future dominance in the space.

In July, Google chief Sundar Pichai said that Google Search’s new AI tool, AI Overviews – which had some hiccups upon its initial release — I have seen “great progress” and increased user engagement for 18-24 year olds.

The company announced a range of new and updated AI products, including new versions of its rival ChatGPT Gemini as well a universal AI assistant.

Google is also facing the second major federal antitrust lawsuit in the US this year, focusing on its dominance of the advertising market. This case stems from a 2023 DOJ processalleging that the tech giant engaged in “anti-competitive, exclusionary and unlawful conduct to eliminate or seriously diminish any threat to its dominance of digital advertising technologies.”

This lawsuit specifically targets Google’s technology stack, specifically its Ad Manager, the platform that helps publishers and advertisers manage and buy and sell advertising on sites. The federal government’s complaint alleges divestment of Google’s Ad Manager Suite, but does not target any of the other areas of Google’s adtech technology stack.

Department of Justice estimate that Google’s share of the adtech market was between 40% and 90% as of 2022.