The antitrust club is here! The Department of Justice urges the court to "force Google to sell the Chrome browser."
The U.S. Department of Justice demands that Google pay a heavy price for its monopolistic behavior, including three core measures: a court-mandated sale of the Chrome browser, termination of agreements that grant its search engine default status on devices such as smartphones, and a requirement to provide data access to competitors. In addition, Google's loss in another antitrust case could lead to the breakup of its $31 billion advertising business
The trillion-dollar tech giant Google is facing unprecedented survival threats—forced sale of the Chrome browser, restructuring of the default search agreements, and a potential split of its $31 billion advertising business.
On April 17th, Eastern Time, according to media reports, U.S. District Judge Leonie Brinkema ruled that Google violated antitrust laws in the markets for advertising trading platforms and ad servers (the tools websites use to sell ad space), and plans to spend three weeks hearing arguments and evidence on what remedies should be taken to restore market competition.
The U.S. Department of Justice argued in court documents that Google should pay a severe price for its monopolistic behavior, including three core measures: court-mandated sale of the Chrome browser, termination of agreements that grant its search engine default status on devices like smartphones, and requirements to provide data access to competitors.
To make matters worse, last week Google lost again in another antitrust case regarding digital advertising tools. U.S. Federal Judge Leonie Brinkema ruled that Google violated antitrust laws in both the advertising trading platform and ad server markets, which could lead to the risk of splitting its $31 billion advertising business.
Targeting Profit Core, Google Faces Unprecedented Survival Crisis
These measures proposed by the Department of Justice directly target the core of Google's business model.
According to media reports, last year's trial revealed that Google pays Apple over $20 billion annually to ensure that Google's search engine is the default option on Apple's Safari web browser.
On Monday, DOJ attorney David Dahlquist stated at the hearing:
“We are at a turning point. The court has the opportunity to correct the monopolies of the modern internet and restore competition for decades to come.”
In the opening statement on Monday, Google's attorney John Schmidtlein criticized that the remedies proposed by the government are a “wish list” of its competitors and claimed:
“These overly intrusive remedies will harm competition rather than promote it.”
It is worth noting that the impact on Google from the digital advertising tools antitrust case may not be that significant. In 2024, Google's advertising network division is projected to generate $30.4 billion, accounting for only 11% of Google's total advertising revenue, indicating that even facing a split, the company's core business model may remain relatively stable.
Regulatory Storm Sweeps Silicon Valley, Tech Giants Face Total Collapse?
Wall Street Watch previously mentioned that this case began during the Trump administration. In 2020, the U.S. Department of Justice, along with attorneys general from 52 states and territories, jointly sued Google, accusing it of paying billions of dollars to tech peers like Apple and Samsung, smartphone manufacturers, and wireless service providers to ensure that Google Search is set as the default choice on phones and web browsers. If these partners choose to receive a share of Google's search revenue, they cannot pre-install or promote competing search enginesThe case is also seen as the most significant tech antitrust case since the long battle between the Department of Justice and Microsoft in the 1990s. Dahlquist stated that the case's long history indicates bipartisan opposition to Google's actions.
More broadly, this antitrust action is just part of the regulatory storm facing tech giants.
According to media compiled information, Meta is currently facing an antitrust lawsuit from the FTC, demanding the forced separation of Instagram and WhatsApp; Apple is facing an antitrust lawsuit filed by the Department of Justice, accusing it of locking users into its ecosystem; a Federal Trade Commission case against Amazon is set to go to trial in September.
Analysts pointed out that if Meta also loses its antitrust lawsuit, "the digital advertising landscape could change dramatically within 5 years," which could be a positive signal for market competition