SAN FRANCISCO, California – The Justice Department is pushing to break up a major American tech company after a court ruling found it guilty of violating antitrust laws. This move sent shares of Google-parent Alphabet tumbling over 5% on Thursday as prosecutors laid out proposals that could shake up the search giant’s operations.
In a ruling in September by U.S. District Judge Amit Mehta, Google was found to have unlawfully monopolized the search market through hefty payments to secure its position as the default search engine on smartphones and web browsers. The DOJ is aiming to put an end to these practices and prevent Google from being the default search option on its Pixel smartphones. The agency is also calling for the company to divest its flagship Chrome browser.
Responding to the proposed remedies, Alphabet’s chief legal officer Kent Walker expressed concerns that the changes could jeopardize security and privacy for Americans while hindering investments in artificial intelligence. He raised alarms about potential government overreach that could harm consumers, developers, and small businesses, impacting America’s economic and technological leadership.
While the ruling on anticompetitive payments may benefit Google financially by boosting gross margins, the potential sale of Chrome poses a challenge due to the limited number of companies able to afford such a deal, many of which are facing their own antirust scrutiny. The sale could impact Google’s ad business, a significant revenue source, and its AI offering, Gemini.
Regardless of the outcome of the proposed remedies, Google plans to appeal the decision. The timeline for a judgement is set for August 2025, with uncertainty over how the incoming administration will handle the case. The legal battle began during the previous administration and carried over into the current one.