Table of Contents
- 1 Google argues that a forced sale of the Chrome browser would harm Americans and threaten U.S. leadership.
- 2 Google would be dismembered
- 3 The change of power
- 4 Time frame for an agreement
- 5 The legal situation
- 6 The questions of the past
- 7 The cards are reshuffled
- 8 Considering the rapid evolution of AI technology, how effective will antitrust regulations based on existing legal precedents be in addressing the challenges of the future digital landscape?
The state competition authorities have been taking action against dominant tech companies for decades – and in doing so they are usually only solving the problems of the past.
Google argues that a forced sale of the Chrome browser would harm Americans and threaten U.S. leadership.
Goran Basic / NZZ
America deals with problem companies differently than Europe. While Brussels prefers to heckle companies in advance with complicated rules, the Americans let them do their thing first – and drag them to court if they go too far.
Now the ban is hitting the search engine giant Google. In August, a court ruled that he was maintaining a monopoly in online searches through illegal means. The plaintiff, the US Department of Justice (DoJ), presented a long list of demands this week on how Google should fix the problem.
Google would be dismembered
The search engine provider should sell its Chrome web browser and stop paying other browser providers billions to pre-install Google as their default search engine. Other search engines must be given equivalent access on smartphones with the Android operating system, otherwise Google should also sell Android. The company is also expected to withdraw its 2 billion investment in the AI startup Anthropic; and give other companies cheap access to its vast trove of user data.
All of these demands would hit Google’s business model, which is based on the dominance of its search engine, to its core. The company warns that the proposals would harm Americans and threaten U.S. technological and economic leadership. The choice of words shows: Google is ready for a fight.
And the tech company has a good chance of winning despite the August ruling. Google has three options for this.
The change of power
First, the Internet company hopes that Donald Trump will soon appoint more lenient competition watchdogs who will reach an agreement with Google and not insist on the forced sale of Chrome.
In the USA, two authorities are supposed to ensure fair competition: the Federal Trade Commission (FTC) and the DoJ. Under Joe Biden’s administration, both are taking very aggressive action against companies. Responsible for this are FTC boss Lina Khan and Assistant Federal Attorney General Jonathan Kanter, who is responsible for competition policy at the DoJ.
Both authorities broadly expand the interpretation of how monopolists and cartels cause harm. The pinnacle of the new interventionism was the FTC’s attempt to block the merger of two luxury fashion companies because it would make the market for “affordable luxury” less competitive. A federal court in New York actually followed the FTC interpretation a month ago.
It is certain that Trump will replace Kanter and Khan with competition watchdogs who will allow more mergers. This makes investment banks and private equity firms happy, as they earn money from these deals. However, many legal experts believe that the FTC and DoJ will continue to take a hard line against tech companies under Trump.
The case against Google’s search engine monopoly was launched during Trump’s first term in office, not under Biden. In addition, many Republicans, especially Vice President-elect J. D. Vance, are very critical of the tech giants. Vance praised the actions of the FTC boss Khan and has already spoken out in favor of splitting up Google. Many Trump supporters see Google as an accomplice of the Democrats and accuse the company of suppressing conservative voices. The new head of the communications regulator that Trump just appointed is one of them.
Time frame for an agreement
However, an important part of the Republicans still advocates a business-friendly competition policy. Some legal and technology experts therefore assume that the large companies that are in the sights of the FTC and the DoJ now have a window of one to two yearsto reach an out-of-court agreement with the authorities.
This is supported by the fact that Donald Trump sees many conflicts as a means to an end. He wants to conclude advantageous deals from a strong position. He also measures the success of his policies by how well the stock market performs. The seven largest technology companies, including Google parent company Alphabet, make up almost a third of the US leading index S&P 500. If breaking up Google would scare investors, it would not be in Trump’s interest.
But such arguments remain speculative as long as Trump has not at least appointed the heads of the FTC and the DOJ antitrust division. These appointments will provide strong clues as to whether he wants to be tough or deal-making.
The legal situation
But even if Trump’s team remains tough: the DoJ only submitted a wish list with maximum demands on Wednesday. Secondly, Google has a good chance of fending off this through further legal proceedings. The US competition watchdogs have often suffered defeats against tech companies, under Biden as well as under Trump and previous presidents. Or they resorted to out-of-court settlements and threw their maximum demands overboard.
The best-known case concerned Microsoft at the turn of the millennium. The software giant dominated the PC market with its Windows operating system and used this to also dominate the rapidly growing market for web browsers with its Internet Explorer. Microsoft forced Explorer on PC manufacturers and slowed down competitors such as Netscape Navigator.
In the first instance, Microsoft was condemned and forced to split up: one company would further develop the Windows operating system, the other would take care of the remaining software. The judgment was partially overturned in the second instance in 2001 due to procedural errors. Microsoft and the Justice Department later agreed to a settlement rather than spend more years in court. The software maker withdrew restrictions on competitors, but the split was off the table.
In the Google case, too, the court must ask itself whether the problem can be solved with milder measures than breaking up the company. Google could stop paying Apple and Mozilla for making its search default in Safari and Firefox browsers. Or make it easier for American users to select other search engines as default in Chrome and on Android smartphones with just a few tricks.
The questions of the past
Thirdly, if all of this doesn’t help and the courts decide in favor of the authorities, Google still has a powerful ally on its side: time.
Competition cases can drag on for a long time, and the authorities are always chasing the action: Starting in 2017, the FTC accused chip manufacturer Qualcomm of illegally exploiting a monopoly on 3G and 4G-capable chips for smartphones. The process dragged on: the first instance court ruled in favor of the FTC, the next instance reversed the ruling. In spring 2021 The authorities laid down their weapons and decided not to appeal to the Supreme Court.
At this point, the major mobile phone providers were already rolling out their 5G networks and a new market environment was emerging. Agreements that Qualcomm had entered into with Apple from 2011 and which the FTC particularly criticized were obsolete at this point: From 2018, Apple worked exclusively with Qualcomm’s competitor Intel.
The Supreme Court could have issued a key ruling assessing Qualcomm’s aggressive tactics and setting guidelines for future cases. But in competition law, it is crucial how the relevant market is defined before one can identify monopolists and assess their behavior. Because the market is constantly changing, this question must always be answered anew.
The cards are reshuffled
The Google case launched in 2020 is also already feeling the ravages of time. The first instance judge is not expected to decide whether Chrome will be forked until next August. If Google exhausts the legal process, a ruling from the highest court will probably not be available until the end of the decade.
However, analysts expect that the digital economy will be plowed up by new AI tools by then. Online search will work differently in 2028 than it does today. AI startups such as Perplexity and Open AI are already offering alternative ways to access information online. From 2025, tech giants and startups will be able to rely on even more powerful computer chips from Nvidia to train the next generation of AI models.
Because Google has such a strong market position and is investing tens of billions in AI projects, it is quite possible that the company will continue to play an important or even dominant role in the next era.
The DoJ hopes to tie Google back along the way by banning investments in AI companies. But officials also don’t know which tech giant will dominate which market in 2030. To be on the safe side, the FTC and DoJ are currently investigating all of them: Amazon, Apple, Google, Meta, Nvidia, Microsoft. With a bit of luck, the prosecutors will be in the right place at the right time.
Considering the rapid evolution of AI technology, how effective will antitrust regulations based on existing legal precedents be in addressing the challenges of the future digital landscape?
## Open-Ended Discussion Questions Based on the Article:
This article explores the ongoing antitrust case against Google. To facilitate a rich discussion, I’ve divided the interview into thematic sections with accompanying open-ended questions.
**I. Motivations and Potential Outcomes:**
* **Beyond stock market performance, what other factors might influence Donald Trump’s approach to regulating Big Tech companies?**
* **What are the potential benefits and drawbacks of breaking up Google, both for consumers and the technology industry?**
* **Do you think the Justice Department’s demands are realistic and achievable? Why or why not? What other outcomes are possible?**
**II. Legal Precedent and Evolving Markets:**
* **How has the legal landscape surrounding antitrust cases against tech companies evolved over time? What lessons can be learned from past cases like Microsoft?**
* **The article mentions the potential forGoogle’s market dominance to diminish due to emerging AI technologies. How might this impact the outcome of the current antitrust case?**
* **Should antitrust law prioritize preventing monopolies or allowing for the natural dynamism of markets, even if it leads to temporary dominance by certain companies?**
**III. Regulating Big Tech: A Balancing Act:**
* **What are the different perspectives on the role of government in regulating Big Tech? Where do you fall on the spectrum between minimal intervention and strict control?**
* **How can we ensure that antitrust regulations effectively address concerns about data privacy, consumer protection, and fair competition without stifling innovation?**
* **In addition to breaking up companies like Google, what other regulatory measures could be considered to promote a fairer and more competitive digital landscape?**
**IV. The Future of AI and Competition:**
* **How do you envision the future of online search and information access in light of emerging AI technologies? Will companies like Google continue to be dominant players?**
* **What are the ethical implications of using AI for antitrust enforcement? How can we ensure that these tools are used responsibly and transparently?**
* **Looking ahead, what are the biggest challenges and opportunities facing regulators and policymakers as the digital economy continues to evolve?**
These open-ended questions aim to spark a thoughtful and multi-faceted discussion about the complexities of antitrust regulations, the role of Big Tech, and the future of the digital economy.
