For quite a long period of time, Google has been the subject of regulatory scrutiny. However, over time, the company has come closer than ever to facing punishment for its commercial practices. Moreover, this summer, Judge Amit P. Mehta ruled that the way Google engages in business with its search tool and browser, may even amount to monopolization. As the events in the case continue to develop, sources indicate that the DOJ is also contemplating measures that can significantly change the way the company does business.
The DOJ’s potential course of action
In recent conversations with Bloomberg, it was revealed that the DOJ is considering a measure that would force Google to sell its stakes in the Chrome browser business. While this remains the principal target of the DOJ’s possible measures, the proposal may also cover other areas of Google’s operations, such as limitations on data licensing activities, Android, and even artificial intelligence (AI) matters.
If the DOJ’s recommendations would go to court, they should be approved first by Judge Mehta before any actions are taken. Google has raised doubts about the envisaged actions with its VP of regulatory affairs declaring the actions are ‘radical’ and extending beyond the legal issues of the case.
Impact on Google’s business
In addition to Google Search, Chrome is another essential component of the group’s apparatus. It is by far the most popular web browser which allows linking various Google’s offerings like Gmail, Google Drive, or YouTube and even earns money for the company. If Google were to proceed with the divestment of Chrome, such an event would represent a major change for the company, as it would have implications for the bundling of these services and even for Google’s competitive stance in the market for web browsers.
The focus of the DOJ may also give rise to discussions about the prevailing technology adoption in the economy and its competition and innovation concerns. For example, while some believe that breaking up businesses like Google would promote competition amongst smaller players in the market, others warn that such measures may stifle creativity within the industry.
Market reaction and financial considerations
After the announcement of the DOJ’s initiative plans or proposals, the stock price of Alphabet experienced a small dip, which was quickly corrected. This was indicative of the market reaction in question. Although such a course of action will have a significant bearing on Google’s financial projections, the timing and manifestation or otherwise of the caustic actions determine the possibilities of those effects in the future.
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What’s next for Google?
The case would proceed based on how the DOJ puts forth its formal proposal and Judge Mehta’s later ruling. Google has faced judicial scrutiny in the past, however, the present circumstances have a real potential for restructuring the business franchise of the company.
The entire tech space is on high alert as the decision in this case could influence how regulators apply policies to similar tech giants in the future. This lawsuit will either change the history of antitrust enforcement or is likely just another event in the ongoing struggle to regulate big tech firms.