US may seek Google breakup or data share after search monopolization ruling
The US DOJ ruled Google is an illegal monopolist, which could result in breaking up the parent company Alphabet or requiring data sharing with rivals while undercutting Google Gemini's advantage.
Google on the Apple App Store
Google is a word synonymous with searching the web, and with good reason. It has dominated the space for decades and uses that dominant position to ensure competitors can never quite catch up.
At least, that is the ruling from the United States Department of Justice. And, according to sources speaking to Bloomberg, a breakup may be needed.
There are numerous points in time where Google could have reached monopoly status. Some say it's way back when people started using the word "Google" to mean search, while others look to the Alphabet rebrand in 2015.
Either way, Google is massive. While Google Search and text search ads are the center of this problem, they aren't the only portions of the company under scrutiny.
The anonymous sources suggest that Android could be a primary target for divestment from Alphabet. The operating system is licensed by the company but requires things like Chrome and Gmail to be pre-installed and un-deletable, for example.
Alphabet also contains products like YouTube, Waze, and the new Google-made AI Gemini. It isn't clear exactly how far a breakup would go or which companies would go where, but a divestment of Android could include more than just the operating system.
Another option could be requiring Google to provide access to its search data. The EU Digital Markets Act already requires this of Google, and a US requirement could be even more impactful for competitors.
Of course, there's also the option of breaking up Alphabet and requiring search data shares. No official decisions have been made in the case.
Whatever happens, it is clear that exclusive contracts like the one between Google and Apple won't be possible anymore. Which, in turn, has pushed Apple to search for more services revenue from sources like Patreon subscriptions.
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Q1 2024 smartphone vendor market share rankings:
○ Samsung 20%
○ Apple 17%
○ Xiaomi 14%
○ OPPO 8%
○ vivo 7%
If the aim is to go after monopoly power, then Amazon and Facebook should be next in line.
Exactly. Making a lot of money by selling products people want does not make a company a 'monopolist' by any mainstream/common legal or economic definition of that word. To be a monopolist, you almost always must have either (1) very large market share yourself or (2) be involved in a conspiracy with other firms which, when combined with you, jointly have a very large market share (ie, a cartel).
The only way in which Apple can be seen as a 'monopolist' is through collusion with Google. The lawsuit against Google has ended that collusion.
If Apple were to start colluding with Google to make iOS + Android a joint monopoly (and I think Steve Jobs kinda sorta wanted to do that, and got pissed when Google wouldn't cooperate), then that would be an issue. But they aren't doing that either, sfaik.
I think a lot of antitrust officials around the world have lost their minds going after companies that clearly are not monopolists. If governments are concerned about unequal income / wealth distribution, I share their concerns, but the solution to that problem is progressive income and wealth taxes on individuals, not trying to interfere in the efficient operation of successful companies.
The market carveout the judge used first required ignoring that nearly 60% of all product searches start with Amazon, and TikTok and Facebook/Instagram turning into defacto search engines for a new generation. Companies like ChatGPT and its search engine go unmentioned, since AI search didn't exist when the DoJ filed its case years ago.
A few years ago when the EU took exception to Google's search market dominance and mandated Google put search engine choices front and center, no defaults, it didn't move the market share one iota. Apparently, people really do use Google because they like them, at least more so than the options, and overwhelmingly choose Google anyway. If that were not true, then how to explain Microsoft Windows default search engine not gaining a LOT of market share? With every Windows update users have to again actively choose not to use the default Bing. Google is certainly going to be able to make a logical appeal based on the above.
So given all that, the likelihood of a breakup as being the only proper solution is near zero IMO.
It's not just the IT technology that we're talking about here, it spans very broadly across every facet of human life. It's not like the government mandated the pharmaceutical companies and health care system equipment builders to explore new ways to improve medical treatments that improve longevity and reduce human suffering. Closer to home, we wouldn't be able to buy 55" 4K TVs for $300 if the major players in that market were required by the government to "be nice" or concede a part of their profits to benefit the smaller players. In any competition there will always be winners and losers. Success should not be punished. Losers can learn from their mistakes, rethink, regroup, and take another crack at it - or move on.
Maybe I'm only looking at the flaws that have resulted from government intervention. It just seems to me that things never get better once politicians and government overseers get involved. It's the polar opposite of the King Midas touch, gold is turned into crap. At best the benefits are superficial and overlook the stagnation and loss of quality that occurs when competitors are forced to race to the bottom on price to stay in a game they can no longer control. In my opinion the quality of service for telecommunication services and airline travel have degraded significantly post regulation. There are certainly many more competitors in the game, but the quality of service has gone to crap. Things that were once pleasurable and predictable, like airline travel, are now tortuous. Is the cloud of nostalgia blinding my view? Maybe, but I'm having difficulty putting together a list of "wins" that have taken place without a resultant loss or degradation in quality. I'm sure there are wins out there somewhere. Anywhere?
What I'm not saying is that all government oversight is bad. There are some areas like health, safety, environmental, social systems, law enforcement, defense, construction and maintenance of shared infrastructure, etc., where government oversight is absolutely crucial. But deciding who wins and who loses in competitive marketplaces for consumer goods, especially ones with abundant choices, seems to be a road too far and especially when it's done with very blunt instruments and by people who take away consumer's ability to make their own decisions. We're not stupid. Nobody forced me or coerced me into signing up for Apple Music. It was my choice, and like many things Apple, I wasn't aiming for the cheapest, I wanted what I believed to be the best for me. No regrets.