Google’s parent company, Alphabet, is facing increasing pressure as the U.S. Department of Justice (DOJ) is pushing for the breakup of the technology giant in a pending antitrust case. The DOJ has charged Google with monopolistic behavior that stifles competition and harms consumers, which threatens the company’s future and that of the technology industry.
The 2020 lawsuit claims that Google has used its control of search and online advertising to maintain an unfair competitive edge against others. Google’s exclusive arrangements with device manufacturers and browsers have effectively excluded competitors, the DOJ asserts, forming a monopoly that crushes innovation and consumer choice.
“Google’s conduct has allowed it to dominate the marketplace at the expense of competition,” a DOJ spokesperson said. “The company should be broken up to restore fairness and create a level playing field.”
The DOJ’s attempt to unwind Google is the most significant development so far in the case, one of the largest antitrust cases in U.S. history. If successful, the suit could force Google to spin off significant parts of its business, including its search function and advertising activity.
Google dismissed the allegations and said that the success of its business was founded on innovation and consumer choice rather than anti-competitive conduct. “People use Google because they want to, not because they have to,” a company spokesman said. “Breaking up the company would hurt consumers and the wider tech ecosystem.”
The case has been widely scrutinized, with politicians, industry analysts, and consumer associations providing their comments on the potential implications. The advocates of the lawsuit argue that Google’s dominance has stifled competition and checked innovation, while detractors warn that a breakup would have unintended consequences on the technology industry and the economy.
“Antitrust enforcement is needed, but it should be done with care,” said one analyst. “Breaking up Google could create more issues than solutions, especially in a more dynamic industry.”
The lawsuit has also weighed on Google’s shares, with investors worried over the financial implications of the adverse ruling for the bottom line. Alphabet shares were volatile over recent months as market participants weighed whether the case was likely to prosper and what industry-wide implications, if any, it would have.
The hearings could provide more information about how the U.S. government will deal with large tech companies and, with Amazon, Apple, and Facebook under investigation for possible antitrust issues, could define the industry for generations to come and dictate how the government responds in the near future.
Further on, “On the other hand, we feel that because of the best products and services, consumers should have their choices that would maximize competition.” For both the DOJ and Google, the court battle is likely to be long and arduous, but therein lies a reminder that in the technology space, the tension between regulation and innovation has heightened. The ruling of the court will affect Google and its competition in online markets for the long haul.
