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LOS ANGELES. — Google is digesting a US judge’s potentially seismic ruling that it illegally monopolises online search and related advertising
Google owner Alphabet’s inevitable appeal means this the legal process is likely to carry on for some time yet.
But, already, the potential consequences of the judge’s decision are being considered, ranging from cash fines to other, more complicated remedies.
The nuclear option would be to demand Google breaks itself into smaller chunks — a move US officials have not ruled out.
Google is much more than just search.
Just look at Android, a firm it bought for US$50m in 2005, which now runs on the majority of smartphones — or YouTube, a US$1.65bn acquisition in 2006, which now generates many multiples of that in revenue each year.
The argument might be that all of these can remain under Google, but the actual search engine should be spun off into a separate business.
That might cause consternation for Alphabet executives.
But as long as Google remained the default search engine on devices, the average consumer would be unlikely to notice the difference.
“Any such move would certainly be met with years of litigation and regulatory bun-fighting, but it seems to be far more ‘on the table’ than at any time in Google’s history,” said Gareth Mills, Partner at legal firm Charles Russell Speechlys.
Another potential remedy centres on Google’s practice of paying other companies to use it.
The US said Google was currently paying firms like Apple huge amounts of money each year to be pre-installed as the default search engine on their devices or platforms.
The judge agreed.
The contention is, had Google never spent that money, the big firms might have been encouraged to develop their own search experience.
Instead, Apple’s Safari browser for example uses Google by default whenever you use it to search the web.
If remedial action significantly affected Google’s ability to pay other companies to use it, perhaps those firms might start a rival.
Here though they would run up against Google’s incredibly strong customer recognition for search. Despite its own high brand profile, it is hard to imagine telling someone to “Apple” something.
The iPhone-maker will of course be keen to keep the money from Google rolling in, which according to one analyst amounted to US$20 billion in 2022.
Whatever happens next, past experience suggests it won’t happen quickly.
Back in 1999, Microsoft found itself in a very similar situation to where Google is now.
The firm had just been found by a US judge to have created a monopoly, and a year later a court ordered the firm to be broken up.
Microsoft appealed the decision, and in 2001 the original decision to break it up was overturned.
By the end of 2002 Microsoft had agreed a settlement with the US Department of Justice, which a judge accepted.
But some US states disagreed, and it wasn’t until 2004 — five years after the original ruling — that the settlement was officially signed off. — BBC.
Online Reporter