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The Justice Department's remedial action against the Google separation is putting the tech world on notice


The Justice Department's remedial action against the Google separation is putting the tech world on notice

The U.S. Department of Justice said in a new court filing that it may recommend a breakup of Google (GOOG, GOOGL) as an antidote to unhealthy competition in the search engine market, showing how far Washington is willing to go to rein in Big Tech.

DOJ lawyers used a 32-page document to outline a framework of options for D.C. District Court Judge Amit Mehta to consider, including “behavioral and structural remedies that would prevent Google from offering products like Chrome.” , Play and Android to improve Google search.”

Google said in a blog post that “the DOJ's radical and sweeping proposals risk harming consumers, businesses and developers.”

The stock fell slightly in premarket trading on Wednesday.

The proposal is the Justice Department's first move to break up a tech empire since it tried to do so with Microsoft (MSFT) more than two decades ago.

That case — which the DOJ referred to in its court filing Tuesday — led to a settlement in 2002 that opened the door to broader competition in the Internet browser software market.

The DOJ's move also sends a signal to other tech giants currently facing antitrust proceedings from the DOJ and other Washington regulators, as part of a broader effort by the Biden administration to rein in what they see as anti-competitive behavior across a range of industries.

The government has already alleged anti-competitive behavior against tech giants Apple (AAPL) and Amazon (AMZN), claiming that Microsoft's acquisition of gaming giant Activision Blizzard would create a monopoly in the gaming market.

The case against Google, which targeted its dominance in the search space, resulted in a landmark decision in August in which DC District Court Judge Amit Mehta sided with the DOJ and concluded that Google controlled the online search market and the illegally monopolized the search engine advertising market.

In this illustration photo taken in Krakow, Poland, April 25, 2024, the Google logo is seen through the broken glass on a website displayed on the screen of a phone. (Photo by Jakub Porzycki/NurPhoto via Getty Images)In this illustration photo taken in Krakow, Poland, April 25, 2024, the Google logo is seen through the broken glass on a website displayed on the screen of a phone. (Photo by Jakub Porzycki/NurPhoto via Getty Images)

The DOJ said in a new court filing that it is considering breaking up Google, among other options, as a possible remedy in a landmark antitrust case. A judge must make the final decision. (Photo by Jakub Porzycki/NurPhoto via Getty Images) (NurPhoto via Getty Images)

Mehta concluded that Google's agreements with browser vendors and devices based on Google's Android operating system prevent competitors from entering and growing in markets.

It is now up to Mehta to decide what to do now in a separate “remedial” phase of the process, which is expected to begin in 2025.

The DOJ is expected to submit a more detailed document outlining these remedies by November 20th. But the 32-page document, filed late Tuesday, offers several points of focus that go beyond forcing Google to sell parts of its business.

These are contracts that secure the Google search engine by default on Internet browsers and Internet-connected devices that use Google's Android operating system.

Google is paying up to $26 billion a year to maintain its position in mobile devices like Apple (AAPL) and Samsung smartphones.

Justice Department lawyers said that to prevent further harm, they may seek to restrict or terminate Google's use of such contracts that use Chrome, Play and Android to benefit Google Search, as well as “other related revenue sharing agreements.” with search and search-related products, possibly with or without the use of a selection screen.”

WASHINGTON, DC – MAY 31: Judge Amit Mehta of the U.S. District Court for the District of Columbia speaks during the Department of Justice's Asian American and Pacific Islander Heritage Month Observance Program at the Justice Department on May 31, 2017 in Washington. Direct current. (Photo by Mark Wilson/Getty Images)WASHINGTON, DC – MAY 31: Judge Amit Mehta of the U.S. District Court for the District of Columbia speaks during the Department of Justice's Asian American and Pacific Islander Heritage Month Observance Program at the Justice Department on May 31, 2017 in Washington. Direct current. (Photo by Mark Wilson/Getty Images)

Judge Amit Mehta of the U.S. District Court for the District of Columbia. (Photo by Mark Wilson/Getty Images) (Mark Wilson via Getty Images)

The DOJ could also ask the judge to force Google to share the data it uses to refine its search algorithms with rival browsers and search providers and limit the company's dominance over search text ads.

The DOJ suggested that the judge also consider preventing Google from illegally monopolizing related markets in addition to the search and search advertising markets.

The judge may be asked to force Google to give websites more options to opt out of “any Google-owned artificial intelligence product.”

Google rejected the DOJ's proposals.

“We believe today’s draft goes far beyond the legal framework of the court’s decision on search distribution agreements,” wrote Lee-Anne Mulholland, vice president of regulatory affairs at Google, in a blog post.

Google has promised to appeal. And Judge Mehta could put a hold on any orders to change Google's behavior while the court appeals his ruling to the appeals court in Washington.

The judge would lose the right to impose remedies if the appeal finds that Google did not violate the law.

And even if Google fails and is ordered to change its behavior, Judge Mehta could later adjust his orders to better ensure the restoration of competition.

Google faces antitrust challenges on other fronts. The company is currently defending itself in a separate lawsuit before the U.S. Department of Justice, alleging that it has a monopoly on the technology used to place and sell online ads.

And earlier this week, another federal judge ordered Google to open its App Store as part of the settlement of a lawsuit by Epic Games Inc.

The DOJ cited that ruling in its court filing Tuesday, which cited a breakup of Google as a possible remedy, noting that the judge in the Epic Games case said remedies should “bridge” to address network effects fight.

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