The Department of Justice’s consideration of whether to push for breaking up Alphabet Inc., Google’s parent company, raises critical questions about how such a move could affect consumers who rely heavily on Google’s services.
Google dominates the search engine market, commanding approximately 90% of market share. The DOJ argues this dominance persists through exclusive agreements with device manufacturers and browser developers, which may stifle competition and innovation. Judge Amit Mehta’s ruling in Washington, D.C.’s US District Court that Google has illegally monopolized the search market intensifies the scrutiny.
A breakup could usher in a new era of competition and lead to more innovative and diverse search options. Smaller search engines and new entrants might offer specialized services or enhanced privacy features, appealing to consumers seeking alternatives to Google’s data-centric model. Greater competition also could drive improvements in user experience, as companies strive to differentiate themselves in a more competitive marketplace.
Despite the potential benefits, these remedies could create new challenges for consumers. Disrupting Google’s integrated ecosystem might lead to fragmentation, making it less straightforward for users to navigate between the services they rely on daily. Google’s suite of services—including Gmail, Google Maps, Google Drive, and YouTube—are indispensable to many for work, communication, and entertainment.
Fragmenting them or limiting their interoperability could cause significant disruption, frustrating users who depend on their seamless integration. There also is concern that smaller search engines might introduce charges for services that Google currently offers for free. If new entrants can’t match Google’s advertising revenue model, they might resort to subscription fees or paid features, placing a financial burden on consumers accustomed to free access.
The DOJ is also considering measures that would require Google to share certain data and technologies with rivals. This could lower the barriers to entry for competitors and foster innovation, ultimately benefiting consumers with more choices. But it also introduces complex issues around compliance, liability, and consumer privacy.
While such measures could level the playing field, they must be carefully managed to protect sensitive user information. Liability and recourse for consumers, especially those who are less tech-savvy, must be defined clearly to prevent exposure to data breaches or cyberattacks.
The DOJ’s proposed remedies include prohibiting Google from favoring its own search engine on its platforms and requiring the company to make available its search indexes and algorithms to competitors. It also suggests allowing websites to opt-out of Google’s AI products, such as those that generate summaries using large language models.
Some antitrust experts have expressed concerns about potential unintended consequences. Critics argue that forcing Google to share proprietary technology could undermine incentives for innovation, ultimately harming consumers who benefit from rapid technological advancements. There also is the risk that overregulation could stifle competition rather than enhance it.
It’s about determining the type of innovation we want to encourage. Deterring socially suboptimal innovations, such as proprietary protocols that create interoperability issues by making devices and services incompatible, is acceptable—and the design of regulations plays a significant role in shaping this. Regulatory choices and design are key factors in ensuring competition fosters beneficial innovations that benefit community and consumers.
While the DOJ’s proposed remedies intend to assist competitors, they might inadvertently harm consumers by slowing innovation and reducing quality of services. Consumers could experience delays in the rollout of new technologies or features.
Google’s substantial resources enable rapid development and deployment of cutting-edge innovations. For example, when OpenAI’s ChatGPT gained popularity, Google swiftly introduced its own AI-driven conversational agent, Bard, offering alternatives to consumers and keeping pace with emerging technologies.
A fragmented company might struggle to maintain the same pace of advancement, potentially slowing the evolution of services that enhance usability and efficiency.
Altering the structure of a global tech leader such as Alphabet could have international repercussions. Google plays a crucial role in public and private sectors, including cloud computing, cybersecurity, and AI research.
The company’s contributions are integral to the US economy and its technological leadership globally, particularly in the context of the US-China race for AI supremacy, along with economic competition and national security interests.
If the US were to lose its technological edge, consumers could indirectly feel the impact through diminished innovation and reduced availability of advanced services. The potential breakup of Google is part of a broader conversation about corporate power and consumer welfare.
Antitrust actions, like those the Federal Trade Commission is pursuing against other tech giants, aim to address concerns about monopolistic practices and their effects on prices, choice, and innovation. Some argue such interventions protect consumers and promote fair competition, while others contend they may hinder efficiency and global competitiveness of US tech companies.
It’s essential to balance increased competition with the need for reliable, high-quality services. While the allure of enhanced competition and innovation is strong, the risks of service disruption, privacy concerns, and a potential slowdown in technological advancement must be carefully considered.
Instead of a full breakup, alternative remedies could involve prohibiting exclusive agreements that limit consumer choice or enhancing data portability to empower users—potentially promoting competition without disrupting the services they depend on. Prioritizing innovation, security, and consumer welfare is crucial. In our tech-dependent world, the choices made today will shape consumer experiences for years to come.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Author Information
Nizan Geslevich Packin is a law professor at Baruch College, City University of New York and University of Haifa Faculty of Law.
Write for Us: Author Guidelines