“The U.S. Justice Department is considering breaking up Google… The report follows the landmark antitrust ruling against Google earlier this month, and divestment of the search giant’s Android OS and browser Chrome are among the possible measures under discussion. “ – LinkedIn News.
First, the probability that the US Department of Justice will break up Google, in my opinion, is closer to 0 than 1. Yes, despite everything, I expect Google to modulate its business model which even though it used innovation to become #1 on search, it cannot pay to remain #1, and that means, it is no longer permitted to pay Apple, Samsung, Tecno, Mozilla, etc to make the Google search page the default in those products.
In the core tenet of entrepreneurial capitalism, becoming a category-king is the desire of all companies, and assuming monopoly via innovation is attainable by just a few. For Google, it is a dominant king in the world of search, unrivaled and uncontested in all forms and ways. But Google was not sure of itself, and went into paying to build moats, to keep its castle of profits via advertising. The government must extract monetary fines, supervise the firm, and get concessions that the act must NEVER happen again.
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And that is largely what will happen. Google seems harmless because most of its products are largely free. If you break it, you will introduce many vectors that may even harm the consumers you want to protect. Sure, you want the next Google to emerge in the future, but that should not come via breaking Google:a new operating principle will do, by forcing it to focus on innovation and avoid building illegal moats.
More so, if you take Android out of Google’s Alphabet, Apple iOS will become an uncontested mobile winner since there are few companies that have resources and technical capabilities to challenge Apple (Microsoft, Meta/Facebook or Amazon will not likely be interested to avoid antitrust searchlights). Take Chrome out, there is no data which shows that any company can live on a browser alone!
The Verdict: make changes on business model with some fines but leave Google and Alphabet alone.
The Justice Department’s latest considerations represent the most serious threat Google has faced since the U.S. government’s failed attempt to break up Microsoft over two decades ago. According to insiders, this time around, the department is pulling no punches. Among the remedies being floated are the divestiture of Google’s Android operating system, its Chrome web browser, and potentially even its crown jewel: the AdWords advertising platform.
The deliberations follow a bombshell ruling by Judge Amit Mehta on August 5, 2024, that Google had illegally cemented its dominance in the online search and search advertising markets. With this ruling in hand, the government is now poised to push for measures that could fundamentally alter Google’s sprawling business empire.
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