Recently, Google has been basking in the limelight due to its AI technology, yet it faces the embarrassing situation of potential breakup.

On October 9th local time, the 2024 Nobel Prize in Chemistry was announced, with half of the prize money jointly awarded to Demis Hassabis, the founder of Google's DeepMind and a British scientist, and John M. Jumper, a scientist at the company. The day before, one of the winners of the Nobel Prize in Physics, Geoffrey Hinton, had also worked at Google.

This is a concrete manifestation of Google's deep cultivation in the field of AI. However, on the same day, according to media reports, the U.S. Department of Justice is considering requiring Google to sell some of its businesses to address Google's "illegal monopoly position" in the search field.

The U.S. Department of Justice pointed out in the document that it is considering requiring Google to undergo structural reforms to prevent Google from using its Chrome browser, Play app store, Android operating system, AI products, etc., to profit its search business.

Analysts warned that Google is currently facing competitive pressure from OpenAI, the manufacturer of ChatGPT, and other AI search engine startups. The move by the U.S. Department of Justice may disrupt Google's business.

Mandatory Breakup May Occur

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In this 32-page document titled "The Remedial Framework Proposed by the Plaintiff," the U.S. Department of Justice pointed out that Google, with its huge search engine market share and AI technology advantages, has caused a significant monopoly impact on the market. This monopoly position not only limits the development space of competitors but may also have adverse effects on consumers.

It is known that the most likely departments to be separated from Google are the Android operating system and the web browser Chrome.

The document also mentioned that Google obtained market scale and data advantages by signing illegal distribution agreements with other technology companies, making its search engine the default choice for smartphones and browsers. This exclusivity contract further strengthened Google's market monopoly position.

At present, Google's search engine occupies most of the global market share, especially in the field of mobile devices, with a market share as high as nearly 95%.The U.S. Department of Justice is demanding the inclusion of a "choice screen" on electronic devices, allowing consumers to select their preferred search engine from the outset, rather than having Apple or Google set a default search engine for them. This practice is also the norm in other markets, such as the European Union.

The Department of Justice also pointed out that Judge Amit P. Mehta of the U.S. District Court for the District of Columbia, who is presiding over the case, has the authority to require Google's parent company Alphabet to provide access to the underlying data used in its search results and AI products, in order to break Google's monopoly on data and promote fair competition in the market.

The department stated that it is considering proposed penalties for Google, which would allow websites to opt out of having their data collected for the purpose of training Google's artificial intelligence or appearing in summaries of AI-generated search results. Justice Department officials added that they might even seek to force Google to provide its competitors with the software models used in Google's AI-assisted search functions.

In response, Google's Vice President of Regulatory Affairs, Lee-Anne Mulholland, said in a blog post on the company's official website that the Department of Justice's preliminary proposal to reform the search engine market is "radical and thorough," and could make the customer experience worse. Artificial intelligence is a rapidly rising technology and a fiercely competitive subject in the business market, and "government intervention in this important industry would pose significant risks."

If the U.S. Department of Justice's proposals are ultimately supported by the courts, Google could face the grim prospect of being forced to sell part of its business. The matter would become the largest U.S. company breakup since the breakup of U.S. telecommunications company AT&T in 1984, and also the largest technology antitrust case since the U.S. government's antitrust case against Microsoft in 1998.

However, even if the court rules that Google has violated the law, the process of whether to break up, and how to break up, could take months or even years to complete.

The application submitted by the U.S. Department of Justice on October 8th is only the first step in a lengthy legal process aimed at proposing "remedies." The Department of Justice still needs to continue working with market participants, gather evidence, and submit more detailed final judgment recommendations to the court in November, and then submit revised final judgment recommendations in March of the following year according to the court order.

The origin of this case can be traced back to 2020. At that time, the U.S. Department of Justice, along with the attorneys general of 52 states and jurisdictions, jointly sued Google, accusing Google of paying billions of dollars to technology industry peers such as Apple and Samsung, smartphone manufacturers, and wireless service providers, in exchange for Google Search being set as the default choice on mobile phones and web browsers.

On August 5th of this year, Judge Mehta announced the verdict, finding that Google's search business violated U.S. antitrust laws. Google has clearly stated its intention to appeal the decision, reiterating that its search engine is popular with consumers because it is the best.From a practical standpoint, there is still a certain level of difficulty in breaking up Google.

Legal industry insiders have pointed out that although Judge Meta could theoretically order the breakup of Google, this possibility is not very high. The punishment is more likely to impose new restrictions on the way Google conducts its business, such as limiting Google from becoming the default search engine on mobile phones by paying fees to companies like Apple and Samsung.

Erik Hovenkamp, a law professor at Cornell University in the United States, believes that if the judge considers the breakup as an extreme remedy, it may have unpredictable consequences. For example, the new companies formed after the breakup may be eliminated from the market.

It is worth noting that Google is facing more than one lawsuit. On October 7, in another antitrust case filed by the American game company Epic Games (the maker of "Fortnite"), the jury of the United States District Court for the Northern District of California ruled that Google illegally monopolized the market through its Android app store Google Play, ordering Google to open its app store within the next three years, and the judgment will take effect from November 1.

Last month, Leonie Brinkema, a U.S. district judge in Virginia, also held a jury-less trial for a case filed by the Department of Justice and some states last year. Google was accused of illegally controlling all aspects of the advertising market, forcing customers to use its products, and using its scale to suppress competitors. The closing statements are scheduled for late November.

In addition, Google has two lawsuits in federal courts in Texas and New York. Texas is leading the lawsuit against Google's digital advertising, and the case is scheduled to go to trial in March 2025.