Justice Department could force Google to spin off Android and/or Chrome
Earlier this month a federal judge ruled that Google's search and search advertising businesses violated section 2 of the Sherman Act. This means that the company is a monopolist. On Tuesday, Bloomberg reported that one of the options that the Justice Department (DOJ) is considering imposing on Google as punishment would force it to break up the company. This comes from people who supposedly have knowledge of the talks going on inside the Justice Department. Google plans to appeal the ruling.
Demanding that a company spin-off assets is the ultimate penalty and is one that the DOJ does not seek to impose lightly. Other less draconian options could include forcing Google to share more information with rivals or have restrictions placed on the Alphabet unit that would prevent it from obtaining an advantage when it comes to offering AI products. Again, these talks are private which means that Bloomberg's sources do not wish to be revealed.
For now, the DOJ realizes that it has a big decision to make. The last time the U.S. government demanded that a company dispose of some assets was in 2020 when Microsoft was found by District Court Judge Thomas Penfield Jackson to have violated Sections 1 and 2 of the Sherman Antitrust Act. After an appeals court tossed much of Judge Jackson's ruling, Microsoft settled with the DOJ and remained intact.
Tuesday's report said that the U.S. will try to prevent Google from entering into the type of exclusive deals it has with companies like Apple and Samsung that pay the two device manufacturers billions of dollars a year. In return, Google's search engine is the default search tool on the iPhone and Samsung's Galaxy handsets. If the government demands that Google be broken up, units ripe for forced divestment could include mobile operating system Android, and Google's Chrome web browser.
Another possible unit that Google could be forced to divest would be its AdWords platform used to sell text advertising. Interestingly, starting on September 9th, the DOJ and Google go at it again with the Alphabet subsidiary accused of monopolizing the digital advertising business. AdWords could be at the center of that trial.
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