"Dismember" the Google empire! Chrome and Android may be separated, and AI training data will be forced to share
2024-08-15
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Editor: Editorial Department【New Wisdom Introduction】Having lost the antitrust case, Google may face a "separation". Once it is untied from Chrome and the Android operating system, where will Google go?
Just after Google held its "Made by Google" press conference, a bolt from the blue hit Google.Violating antitrust laws, the world's leading search engine may face forced breakup!The rise of a business empire is often accompanied by continuous mergers and acquisitions, and this is also true for Google. Without a huge thirst for wealth, there would be no "Google Empire" today.The current CEO, Pichai, holds the second baton of Google and is at the center of the storm as never before. Can he turn the tide this time?Last week, Google Search was found to be a monopoly, which shook the entire technology industry. A single move can affect the entire industry, let alone a giant like Google.Not only will the search engine market landscape change significantly, but it will also have an impact on the financial health of companies like Apple.Google's defeat was an epic victory for antitrust justice, but a huge existential crisis for Google.It is reported that after the judge's ruling, the Ministry of Justice is planning its next steps, which may include breaking up Google - separating Google from Android or Chrome browser.If Google is not able to escape this fate, it will be the most significant corporate split since the breakup of US telecommunications giant AT&T in the 1980s.The impact of the Google antitrust case goes beyond itself. It is also a warning to other large technology giants such as Amazon, Apple and Meta.
Although Google is not the only company with a search engine, it has become synonymous with web search.As of July, Google had about 91% of the search engine market share, according to Statcounter, a web traffic analysis company. In fact, it has maintained a market share of about 90% since 2009.Google's second largest competitor is Microsoft's Bing. What is Bing's market share? Less than 4%.The picture below more intuitively explains why Google is facing a split crisis and the living space of other search engines has been compressed to less than 10%.Its dominant search engine, combined with advertising, drives annual revenue of more than $300 billion, making Google and its parent company Alphabet among the world's most valuable companies.Google has such a huge market share through a blatant means, which is to pay tens of billions of dollars to companies such as Apple and Samsung to make Google Search the default option pre-installed on devices and browsers.This allowed Google to achieve rapid development, but also laid the seeds for its defeat today.
After a year-long legal battle between Google and the Department of Justice and state attorneys general, the U.S. Department of Justice won the case and a federal judge formally ruled that Google violated antitrust laws.In other words, Google lost the first major tech antitrust lawsuit in more than two decades.The most damning evidence includes Google paying Apple $18 billion to prevent Apple from expanding its search business and ensure that Google will continue to be the default search engine in 2021.Google also owns its own web browser, Google Chrome, and Android, both of which make Google the default search engine on millions of devices."Google's distribution agreements have captured a significant portion of the market for general search services and have eroded the ability of competitors to compete fairly," Washington judge Amit Mehta said in a 286-page ruling.And by monopolizing mobile and browser services through exclusive distribution agreements, Google can raise the price of online advertising with impunity without any consequences.Google said it would appeal the ruling, and Mehta has ordered the two sides to begin the second phase of the litigation, which will involve what steps the government will take to restore competition, including breaking up Google.In addition to the breakup, the Justice Department is also considering other milder antitrust measures. These include requiring Google to share more data with competitors such as Microsoft Bing and DuckDuckGo. Doing so will help competitors improve search results and compete more effectively with Google.This is the first time Washington has broken up a company for illegal monopoly since its failed attempt to break up Microsoft 20 years ago.According to the New York Times, the judge scheduled a hearing on September 6 to discuss next steps with Google and the Justice Department.The Justice Department's Google Trial Panel
If the Justice Department moves forward with the split, the Android operating system and Chrome browser would be the business units most likely to be spun off.The number of users of these two products is extremely large, with Android installed on approximately 2.5 billion devices worldwide.Mehta noted in his ruling that Google requires device makers to sign agreements requiring that apps such as Gmail and the Google Play Store be pre-installed and cannot be uninstalled.In addition to Android and Chrome, officials are also considering forcing the sale of AdWords, Google's platform for selling search ads.The ruling also noted that Google had a monopoly on the ads that appeared at the top of search results pages, which were sold through AdWords.The move will have a significant impact on Google's advertising business, as search ads account for about two-thirds of Google's total revenue.If the Justice Department doesn't require Google to sell AdWords, it could instead require Google to provide interoperability so that AdWords can run seamlessly on other search engines.precedent
In order to break up monopolies, moves to break up large technology companies have long been underway.The last company to be embroiled in an antitrust lawsuit was Microsoft.Nearly 20 years ago, as the Internet was taking off, Microsoft bundled its own Internet Explorer with Windows, severely hindering the development of other browsers.The district court ordered Microsoft to unbundle Internet Explorer from Windows and split it into two parts.But Microsoft appealed and won, avoiding the fate of being broken up.In 2001, Microsoft's antitrust case was finally resolved with Microsoft making a compromise - allowing manufacturers to sell Windows PCs with other operating systems and its competitors' software.Microsoft survived in part because of inappropriate public statements made by the judge during the initial trial.The court did affirm the spirit of Jackson’s conclusion—that Microsoft did have a monopoly in the market for computer operating systems and had violated U.S. antitrust laws. But Jackson’s radical solution to break up Microsoft appears to have failed, and the white-haired, bear-like district court judge will forever be shaped by the appellate court’s opinion in his life and career.
Now, Google has also filed an appeal, but facing the criticism from the Department of Justice, it remains unknown whether it can escape as luckily as Microsoft.If Google wins the appeal, it will be the second Microsoft, and if it loses, it will be the second AT&T.More than 40 years ago, the telecommunications giant was broken into its own pieces - one long-distance company and seven local phone companies.Influence
Although Google continues to appeal the ruling, the possibility of Google being split remains high.Once the split begins, it will be a life-or-death catastrophe for Google, whose market value is close to $2 trillion.At 3:50 p.m. on the day the verdict was announced, Alphabet's stock price fell 4.5% and Apple's stock price fell 5.8%.Google Search is the company's biggest cash cow, so directly reducing its revenue would be a blow to the company's main artery.If any of them were no longer a Google product, Google would simply lose half of the search and smartphone markets.If, as the industry claims, A technology integration will also become the core of smartphones, then Google, with Gemini technology but no Android, will find itself in trouble in this key area.And, just yesterday, Google held its annual hardware launch event to showcase its latest series of hardware products such as mobile phones, including the Google Pixel smartphone.At the event, Google executive Sameer Samat used a Google Pixel smartphone to demonstrate the effects of Gemini AI, and was the first to release the voice mode Gemini Live, intercepting OpenAI's AI voice function.As you can imagine, without Android, Google wouldn’t have the hardware foundation to ensure that billions of people would prefer Gemini-powered chatbots in their daily lives.The impact of Google's breakup will also extend far beyond itself and affect the entire industry, as many of its peers are also involved in similar antitrust cases, and Google's judgment will become an important judicial reference.For example, the Federal Trade Commission filed a lawsuit against Meta, wanting it to divest Instagram and WhatsApp.The Federal Trade Commission has also filed a complaint against Amazon, which some experts say could lead to a breakup of the e-commerce giant's logistics services.Therefore, all major technology giants are in danger and are waiting for the final result of this trial.
In addition to breaking up, the Justice Department has given Google another path - divesting or licensing its data to competitors such as Microsoft's Bing or DuckDuckGo.Google's contracts ensure that its search engine has access to the most user data - 16 times that of the next closest competitor.Google's monopoly on data flow means that its competitors do not have enough data to improve search results, and are unable to compete effectively with Google.Europe's recently enacted Digital Markets Act also made similar requirements, requiring Google to provide some data to third-party search engines.Google has publicly stated that sharing data could raise user privacy issues and that it only provides search information that meets a certain threshold.This measure is also based on precedent.In 1956, the Department of Justice filed its first lawsuit against AT&T, requiring AT&T to provide a royalty-free patent license.In the Microsoft antitrust case, the Department of Justice required Microsoft to provide some APIs to third parties for free.AI products or search for new features?
For years, Google has crawled websites to ensure they appear in search results. After joining the AI race, Google used this data to develop its own artificial intelligence products.Last fall, some companies expressed dissatisfaction and complaints about this.Google had to develop a tool that allows websites to block Google from crawling data for use in developing AI products.But Google did not stop there.In May this year, Google launched the "AI Search Overview", which forcibly covers the content of all websites.Google argued that the "AI Search Overview" was just a new "feature" for search, not a separate AI product.Google, which has been targeted by the Department of Justice, may need to explain its actions.
