Google faces historic break-up amid monopoly ruling

Shares in Alphabet Inc plummeted as the US Department of Justice signalled an extremely rare forced sale of Google’s tech empire following a landmark antitrust ruling.

Google’s internet search empire could be broken by a forced sale in an extremely rare antitrust move being considered by the US Department of Justice.

In a landmark ruling, the tech giant was found to have illegally monopolised the online ad market by spending billions to make Google the default search engine on phones, tablets and computers.

Breaking up the jewel in Alphabet Inc.’s crown is the most drastic in a series of options being considered to remedy the antitrust violations found in the US District Court last week.

Shares in the company plummeted by at least 3.8 per cent after the Department of Justice signalled its intentions in an anonymous Bloomberg report.

The stock price of Google’s parent company, Alphabet Inc., took a hit after new broke of the potential forced sale. Picture: AFP

It would be the first attempt to dismantle a company since Microsoft reached a settlement with the Department of Justice in 2004 over claims its Internet Explorer Web browser was forced onto Windows users.

Among the measures being considered for Alphabet are the divestment of the Android operating system, Google’s Chrome web browser, and its advertising platform AdWords, according to people with knowledge of the deliberations.

The potential sell-off of Android, used on about 2.5 billion devices globally, is the “most frequently discussed” penalty for Google’s illegal monopoly, according to Bloomberg.

Google CEO Sundar Pichai potentially faces the first attempt to dismantle a US company since Microsoft two decades ago. Picture: AFP

Concerned about Google’s market dominance in developing artificial intelligence, Justice Department lawyers may also demand Google to stop forcing websites to allow their content to train the large language models used in its AI products.

Less drastic measures include forcing Google to share its data with competitors like Microsoft’s Bing and DuckDuckGo.

It comes after Judge Amit Mehta ruled last week that Google relied billions in payments – including $A40 billion in a single year – to companies like Apple, Samsung and AT&T to block competitors from becoming the default search browser on most of the world’s smartphones.

Justice Mehta asked lawyers for the Justice Department and Google to propose remedies for the monopoly by September 4, with a hearing scheduled on September 6.

BOMBSHELL LEGAL BLOW TO GOOGLE

A US judge has handed Google a major legal blow, ruling in a closely-watched antitrust case that it has a monopoly with its dominant search engine.

The landmark decision against a “big tech” giant could alter how the sector operates in future.

District Court Judge Amit Mehta found that Google maintained a monopoly for search and for text ads through exclusive distribution agreements that made it the “default” option that people were likely to use on devices.

“After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly,” Mehta wrote in his ruling.

The internet behemoth “has a major, largely unseen advantage over its rivals: default distribution,” he added.

The antitrust trial pitting US prosecutors against Google ended in May with a two-day hearing.

Google maintained a monopoly for search and for text ads through exclusive distribution agreements, a US judge has ruled. Picture: AFP

The case was the first of five major lawsuits by the US government to reach trial, with Meta, Amazon, Apple and a separate case against Google also heading for federal courtrooms.

Held in Washington, the trial was the first time the US Department of Justice has faced a big tech company in court since Microsoft was targeted more than two decades ago over the dominance of its Windows operating system.

Mehta presided over several months of testimony late last year that saw Google CEO Sundar Pichai and other top executives take the stand.

At the heart of the government’s case was the massive payments made by Google to Apple and other companies to keep its world-leading search engine as the default on iPhones, web browsers and other products.

Court testimony revealed that these payments reach the tens of billions of dollars every year to keep its prime real estate on Apple hardware or the Safari and Mozilla browsers.

The Department of Justice lawyers argued that Google achieved and perpetuated its dominance – and strangled rivals – through these default deals that also expanded to Samsung and other device makers.

Mehta concluded, however, that Google’s violation of the Sherman Act did not have “anti-competitive effects.”

Originally published as Google faces historic break-up amid monopoly ruling