Break-ups are never easy, and Google‘s $2tn empire may be facing one. The US Department of Justice has recommended splitting up the company as a potential solution to address its “anti-competitive conduct.” This suggestion comes after a federal judge labeled Google a “monopolist” in August due to its deals with wireless carriers, browser developers, and device manufacturers that strengthened its hold on the online search market.
Google is also facing other challenges. Another federal judge recently ruled that the company must allow competition in its Play store for apps. Additionally, there is a separate lawsuit alleging unfair practices in dominating the online advertising technology market. These cases all contribute to concerns about Google’s size within the tech sector.
However, it may be more effective to focus on limiting Google’s ability to entrench its power rather than breaking it up. Google’s dominance in online search is driven by a network effect and its collection of user data, which allows for improved search tools and increased traffic to its site. This revenue model benefits both users and marketers.
Forcing Google to remove Chrome or Android could prove ineffective since it can still make deals as the default search engine. Even when given choices, users tend to opt for Google over competitors like Microsoft’s Bing. Moreover, targeting size alone sends an unfavorable message to other rapidly growing tech businesses.
Time is also a factor in this situation. A final decision on how to sanction Google may not come until August 2025 or even later if there are appeals. By then, technology and market dynamics could have shifted significantly.
Instead of focusing solely on breaking up the company, the Department of Justice should consider forward-looking remedies proposed earlier this week. These include limiting contracts that allow Google’s search tool as default for other tech companies and encouraging alternative AI-driven search engines.
While investors currently do not seem overly concerned about a potential split, uncertainties surrounding the outcome of this case remain due to the upcoming presidential election. Ultimately, breaking up Google oversimplifies what is actually a complex problem that requires careful consideration of various factors.
