As the US government explores the possibility of breaking up Google, a move authorities say will promote fair competition in the online search market, the Alphabet-owned company has said such “radical” changes “risk hurting consumers, businesses and developers”.
Following a court ruling in August that found Google was unlawfully stifling competition in the market, the Department of Justice is now weighing possible solutions. If its proposals, which could include splitting the company, are accepted by the court, it would be one of the most significant regulatory actions ever taken against a major technology company.
Lee-Anne Mulholland, Google’s vice president for regulatory affairs, said the company is “concerned the DOJ is already signalling requests that go far beyond the specific legal issues”.
“The government seems to be pursuing a sweeping agenda that will impact numerous industries and products, with significant unintended consequences for consumers, businesses and American competitiveness,” Ms Mulholland said on Wednesday.
On August 5, a judge ruled that Google was illegally exploiting its dominance to avoid competition. The highly anticipated decision by district judge Amit Mehta comes nearly a year after the start of a trial pitting the Department of Justice against Google in one of the country's biggest antitrust showdowns.
Alphabet, which is expected to announce its latest quarterly earnings on October 22, was trading 2.39 per cent down at $161.74 a share at 1.10pm New York time.
The company’s total net income in the June quarter jumped 28.6 per cent to $23.6 billion, passing estimates of $22.9 billion. While its revenue during the April-June period surged 14 per cent to almost $85 billion, against analysts’ expectations of $84.2 billion.
Google, the world’s biggest search engine, accounts for nearly 90 per cent of all online searches, according to various reports.
“Google’s unlawful conduct persisted for over a decade and involved a number of self-reinforcing tactics,” the Department of Justice said in a court filing on Tuesday. It is expected to submit a detailed report on suggested proposals by November 20.
The company expressed concern on Wednesday, saying that the Department of Justice’s consideration of forcing Google to share search queries, clicks and results with competitors poses risks to privacy and security.
It also warned that restricting its artificial intelligence tools could hinder American innovation at a crucial time, arguing that splitting off Chrome or Android – Google’s flagship line of products – would not only disrupt these platforms but also cause widespread issues across the tech ecosystem.
“While sharing Google’s search results with others might create a few copycats, it could also decrease incentives for other companies to actually innovate in search,” Ms Mulholland said.
“There are enormous risks to the government putting its thumb on the scale of this vital industry [AI] … skewing investment, distorting incentives, hobbling emerging business models … all at precisely the moment that we need to encourage investment, new business models and American technological leadership.”
The Department of Justice is also considering introducing changes in the advertising market and imposing restrictions on how Google promotes its search engine.
California-based Google company said changes to the online advertising market would reduce the value of advertisements for both publishers and merchants, while also reducing their worth to consumers.
