Will Trump’s DOJ Dismantle Big Tech Monopolies?

November 21, 2024, the U.S. Department of Justice filed its proposed final judgment, recommending sweeping remedies to dismantle Google’s search monopoly. This long-awaited action marks the most significant antitrust move in decades and could become a pivotal moment for Big Tech as President Trump prepares for his second term.

At the core of the DOJ’s plan is the requirement for Google to sell its Chrome browser. The proposal also includes a framework for divesting Android if behavioral remedies fail to increase competition. Remedies include banning exclusive default agreements with device makers and prohibiting Google from developing new browsers.

Unsurprisingly, Google is pushing back strongly and Google’s chief legal officer Kent Walker called the DOJ’s plan a “radical interventionist agenda,” asserting it goes “miles beyond” the concerns outlined by U.S. District Judge Amit Mehta, who ruled in August that Google held monopolies in two markets.

With President Trump back in the White House in January, speculation is mounting over whether his administration will pursue even more drastic actions against Big Tech giants like Amazon, Meta, Microsoft and Apple. Such moves could reshape not only the tech industry but also the global economy.

The Case For Breaking Up Big Tech

The incoming Trump administration has long signaled an aggressive stance on Big Tech, citing concerns about censorship, market dominance and monopolistic practices. High-profile figures in Trump’s circle, such as Congressman Matt Gaetz and Vice President J.D. Vance, have long been critics of tech monopolies. Gaetz has focused on perceived censorship of conservative voices, while Vance has called for reforms to rein in monopolistic practices.

Pam Bondi, Trump’s new nominee for attorney general, could play a key role in this agenda. Bondi has a notable record of consumer protection and antitrust enforcement, having recovered over $1 billion in such matters as Florida’s attorney general. However, her direct involvement with Big Tech enforcement has been limited. Bondi’s public support for former President Trump’s lawsuit against Facebook, Twitter and Google in 2021 suggests a willingness to challenge Big Tech’s influence but leaves questions about her approach to structural remedies.

This momentum aligns with rare bipartisan support, highlighted by the latest action from the DOJ under President Biden. Influential Democrats, including Senator Elizabeth Warren, have also advocated breaking up Big Tech, arguing that monopolies stifle innovation and harm small businesses. With mounting pressure from both sides of the aisle, Big Tech now faces an unprecedented challenge.

Global Antitrust Scrutiny

The U.S. is not alone in scrutinizing Big Tech. Across the Atlantic, European regulators, led by EU antitrust chief Margrethe Vestager, have ramped up investigations. Proposed remedies, such as forcing Google to divest its ad tech business, reflect a global trend toward stricter oversight.

European lawmakers like Andreas Schwab advocate robust measures to ensure fair competition and foster innovation. These efforts could inspire similar actions in other jurisdictions, further pressuring U.S.-based tech giants.

Big Tech’s Likely Targets

A breakup of major tech firms could echo past antitrust actions, such as the breakup of AT&T’s Bell System in the 1980s or the case against Microsoft in the 1990s. Here’s a closer look at the likely targets:

• Google (Alphabet): With a near-monopoly in online search and digital advertising, Google could face significant restructuring. Potential remedies include separating its ad business from platforms like Chrome and YouTube or spinning off Google Cloud Platform to foster competition in cloud services.
• Amazon: Amazon’s dominance in e-commerce, cloud computing and logistics makes it another prime target. Critics argue that splitting AWS from its retail operations could level the playing field in cloud computing and open opportunities for smaller competitors.
• Meta (formerly Facebook): Meta’s control over Facebook, Instagram and WhatsApp has raised concerns about its influence on communication and content moderation. Breaking up these platforms could restore competitive diversity and limit Meta’s outsized power.
• Microsoft: While a veteran of antitrust scrutiny, Microsoft’s growing dominance in cloud computing (Azure) and enterprise software may draw renewed attention. Regulators could push for Azure’s separation to encourage competition.
• Apple: Apple’s App Store practices and control over the mobile ecosystem have drawn criticism. Regulators may seek to separate its hardware and services businesses to promote fairness for app developers and consumers alike.

The Innovation Dilemma

A breakup of Big Tech could have profound implications for innovation. Large tech companies have been instrumental in advancing cutting-edge technologies such as artificial intelligence and sustainable energy solutions. For instance, Microsoft and Amazon have explored nuclear power options to meet the energy demands of AI data centers.

Disrupting these corporate giants could slow progress in areas like AI development and power generation, particularly as hyperscalers have the resources to invest in ambitious, long-term projects. However, breaking up Big Tech might also create opportunities for smaller, more agile companies to step up. A less concentrated market could foster competition, enabling a diverse range of businesses to tackle these challenges.

This democratization of innovation could lead to creative solutions that were previously overshadowed by Big Tech’s dominance. While the transition could bring short-term disruption, it may ultimately stimulate a more competitive technological landscape.

The Transformative Impact on Tech

A breakup of Big Tech would create seismic shifts in the industry, presenting both opportunities and challenges:

• Market Fragmentation: Independent companies emerging from these breakups could foster competition across cloud computing, social media and digital advertising. This could spur innovation, although it may also lead to short-term market instability.
• Opportunities for Small Businesses: Smaller companies and startups could benefit from a less concentrated market, gaining access to customers and opportunities previously monopolized by Big Tech.
• Economic Disruption: Employees, investors and ecosystems tied to these giants could face uncertainty. We could even see some service disruptions as we saw recently with AWS and Azure systems outages. Stock market volatility would likely follow, with ripple effects throughout the economy.
• Impact on Jobs: A breakup could lead to significant workforce restructuring. On one hand, employees in spun-off divisions might benefit from more focused leadership and a startup-like environment that fosters innovation. On the other, redundancies in overlapping roles could result in layoffs, adding to an already strained tech hiring market. Tech hiring has been under pressure in recent years, with many companies implementing hiring freezes or large-scale layoffs in response to economic challenges. A Big Tech breakup could further intensify this trend, creating short-term pain for the workforce. However, it could also shift demand toward smaller, more agile companies looking to compete in the newly fragmented market, potentially diversifying job opportunities over the long term.
• Impact on Equity Markets: A breakup of Big Tech could send shockwaves through equity markets. Shares of tech giants, long considered stable and lucrative investments, may face downward pressure as investors reevaluate the financial health of newly fragmented entities. However, this could also create lucrative opportunities for Private Equity firms. PE firms are well-positioned to step in and acquire orphaned assets spun off from these breakups. Divisions such as cloud computing units, advertising platforms or social media networks could thrive under the focused leadership and operational expertise of private investors. The entry of PE firms could inject capital and strategic direction into these assets, accelerating their growth and mitigating market disruption.
• Enhanced Consumer Choice: A more competitive marketplace could improve pricing and options for consumers, though transitional challenges may arise as smaller players establish themselves.
• National Security Concerns: While these companies operate globally, they are critical providers of technology to the U.S. government. Contracts like the JEDI cloud program highlight the importance of balancing antitrust goals with national security considerations.

What Happens Next?

While a breakup is not guaranteed, the bipartisan appetite for antitrust reform and the Trump administration’s rhetoric suggest significant changes are possible. A dismantling of Big Tech could redefine how technology is developed, consumed and regulated in the U.S. and beyond.

The stakes are enormous. As the tech industry braces for potential upheaval, businesses, policymakers and consumers must prepare for a future that could look radically different. Whether this transformation fosters a more competitive marketplace—or introduces new challenges—remains to be seen.