The U.S. government is approaching year five of its sprawling investigation into the country’s biggest tech companies.
Google, the online search and digital ad goliath, is the first U.S. tech giant to land in federal court fighting antitrust concerns in decades.
In August 2024, Judge Amit Mehta of the U.S. District Court for the District of Columbia stated that “Google is a monopolist and has acted as one to maintain its monopoly.” The judge was referring to the company’s conduct related to its online search business.
Late Tuesday, the Justice Department made recommendations for Google’s search engine business practices, indicating that it was considering a possible breakup of the company, though less dramatic remedies are more likely.
Alphabet, Google’s parent company, plans to appeal the ruling. The company didn’t respond to CNBC’s request for comment on the matter.
Google controls an estimated 88% of the market for general search online, according to the August opinion from Judge Mehta. The Justice Department’s initial complaint, filed in October 2020, says that constructing a legitimate alternative to Google search would cost billions of dollars to build and millions of dollars annually to maintain. Alternative web search engines like Microsoft’s Bing or the privacy-oriented DuckDuckGo have failed to meaningfully make ground on Alphabet’s Google despite years of effort.
“Throughout that trial, we were hearing so many people talk about how Google search has gotten so much worse over the past decade,” said Lee Hepner, a senior legal counsel at the American Economic Liberties Project. The group has filed “friend of the court” briefs challenging Google’s activity in its app store and other properties.
Google is back in court this fall facing accusations of unfair conduct in the advertising technology market. And late in 2023, a jury delivered a guilty verdict against Google in a trial about business practices related to the Google Play app store. The initial challenge was filed by Epic Games in 2020. In September 2024, Epic filed an additional antitrust lawsuit against Google and Samsung, alleging that the company continued to use its monopoly power to unfairly harm competition.
Following the Epic ruling, a U.S. judge on Monday issued a permanent injunction that will force Google to offer alternatives to Google Play for downloading apps on Android phones
“They should break them up for the sake of future innovation and ultimately also for the sake of U.S. democracy,” said Nikolas Guggenberger, an assistant professor at the University of Houston’s law center.
Although the prospect of a Google breakup is far-fetched, some on Wall Street believe such a move could unlock value for stockholders as the company competes for market share in emerging technologies like cloud computing and generative AI.
“I think the sum of the parts do unlock value here,” said Gene Munster, managing partner at Deepwater Asset Management in an August interview with CNBC.
Watch the video above to see why the U.S. government is investigating Google.