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Will “losing” Android be an “unbearable burden” for Google after losing the lawsuit?

2024-08-10

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A federal judge at the U.S. District Court for the District of Columbia issued a ruling on Monday that Google's search business violated U.S. antitrust laws, meaning Google's decades-long dominance in the search market could be overturned.

However, media reports have suggested that the Justice Department will not only seek to weaken the lucrative alliance between Google and Apple, but alsoThe next phase of the case involves punishing Google for its illegal monopoly, and the Justice Department may also try to prevent Google from dominating the next generation of search technology - conversational artificial intelligence.And it makes it easier for rival search providers to cut into Google's 95% share of the search market.

Gene Burrus, former assistant general counsel at Microsoft, said:Justice Department lawyers will almost certainly also ask the judge for "structural remedies" rather than just "behavioral" changes to Google's search business and its partnerships with companies like Apple, potentially forcing Google to divest its Android operating system.The judge has said Android helps Google improperly perpetuate its monopoly.

Bruce said the Justice Department could push for larger changes in part so the government wouldn’t have to actively monitor Google’s compliance with new restrictions on its core business, as past cases have shown such monitoring is difficult to achieve.

No one can predict what the U.S. District of Columbia Judge Amit Mehta will decide, but Lee Hepner, a lawyer at the antitrust group American Economic Liberties Project, said many past precedents show that courts are lenient with the government's remedies after ruling on difficult cases.

The media listed the possible requests that the Ministry of Justice may make to the judge:

Search Protocol

Based on the language of Mehta’s ruling, he appeared ready to undo Google’s exclusive agreements with Apple, Samsung, Firefox and others that make Google the default search provider on their devices or browsers — an idea that Justice Department lawyers will almost certainly echo in their brief.

Monday's ruling has fueled hopes within Microsoft that it could unseat Google through a similar deal, a move that is unlikely to raise antitrust concerns because Microsoft's share of the search market is minuscule.

Microsoft has long sought to replace Google as the default search provider on Apple's Safari browser, but evidence presented in the Google Search trial suggested that Apple never considered Microsoft's Bing as an alternative, in part because Microsoft couldn't pay as much as Google for the privilege.

Google pays Apple more than $20 billion a year and billions more to other search distribution partners. Google makes these payments from revenue generated from searches conducted on partners’ devices or browsers. Google argues that if competitors were to reach such an agreement specifically with Apple, Google’s search advertising revenue would drop by tens of billions of dollars a year.

Android

Analysts believe that while the court may try to dismantle the expensive agreement between Google and Apple, it may be difficult to influence the actions Apple takes after the court punishes Google. That's why the Justice Department may go after another Google product through the court system: the Android operating system.

In their ruling, the judge frequently cited Android’s role in perpetuating Google’s monopoly by effectively forcing Samsung and other companies that use Android to include Google Search as an integral part of their devices.

EU regulators have forced Google to give new Android customers the chance to choose their default search engine, but that doesn't seem to have dented Google's monopoly.

As a result, Justice Department lawyers may push to force Google to divest Android. This could reduce Google's monopoly in the mobile search market, because an independently operated Android system may have no incentive to promote Google Search.

AI

The media also expects that Jonathan Kanter, the Justice Department's antitrust chief, may try to persuade a judge to prevent Google from using its artificial intelligence assets to consolidate its search dominance.

Kanter told Bloomberg on Thursday that “if a company has monopoly power ... then there’s a strong incentive” to develop a new technology like AI “that reinforces the monopoly moat rather than opens up a whole new frontier.”

Currently, Google already integrates conversational AI answers in its search results. One solution could be to force Google to provide its LLM (Large Language Model) to competitors so that they can compete more effectively in the next generation of search.

The Justice Department may also ask a judge to order Google to let competitors use some of the assets that Google uses to develop its AI to train their own AI, including YouTube videos that Google controls.

Ad Tech and App Stores

In addition, Google may also face punitive measures for fees it generates from its app store on devices using the Android system, which is its second-largest source of profit after search.

Last year, a jury in a case brought by mobile game maker Epic found Google guilty of violating regulations in controlling its Android app store and taking a cut of revenue generated by mobile apps. The court is still reviewing potential penalties but could impose restrictions that make it difficult for Google to maintain its app store profits.

Google also faces multiple antitrust lawsuits over conflicts of interest in its ad technology business, which facilitates the buying and selling of ads on websites that Google doesn’t own. The Justice Department is leading one of the ad technology lawsuits, which is set to go to trial next month.