In a significant turn of events, a US judge has ruled that Google illegally monopolizes online search and related advertising. This decision, resulting from a four-year legal battle, marks a potential seismic shift in the tech world. Although Google-owner Alphabet plans to appeal, the ruling's potential consequences are already being considered, ranging from cash fines to more complex remedies. The US government is specifically seeking "structural relief," which could involve breaking up Google. So, what might this mean for you?
Breaking Up the Band
One of the most drastic options on the table is the possibility of breaking Google into smaller entities. Google is far more than just a search engine; it owns Android, which powers most smartphones, and YouTube, a major revenue generator. The argument could be made that while these subsidiaries can remain under Google, the search engine itself should be spun off into a separate business. While this might cause concern for Alphabet executives, the average consumer might not notice much difference as long as Google remains the default search engine on devices.
Gareth Mills, a Partner at Charles Russell Speechlys, notes, "Any such move would certainly be met with years of litigation and regulatory bun-fighting, but it seems to be far more 'on the table' than at any time in Google’s history." A separate hearing will consider the divesture of Google's search engine or other corporate governance controls to address the anti-competitive conduct.
Google's Practice of Paying for Default Status
Another potential remedy involves Google's practice of paying companies like Apple significant sums to be the default search engine on their devices. The judge agreed with the US government's contention that without these payments, firms like Apple might have developed their own search engines. If Google's ability to pay for default status is restricted, we might see new competitors in the search engine market. However, Google's strong brand recognition makes it difficult to imagine users abandoning it in favor of alternatives, even with changes.
Dipanjan Chatterjee from Forrester Research comments, “Any disruption to the revenue stream will have significant implications for Apple. As the case works through the legal system, and the likely outcome appears to be opening up search engine exclusivity, you can fully expect a brand as obsessed as Apple is about customer experience to have a Plan B to ensure a smooth transition for its customers.”
Potential for a Choice Screen
A more likely scenario is the introduction of a choice screen, where users are asked whether they'd like to use Google or an alternative like Microsoft's Bing when they open a browser for the first time. Despite this, it's hard to envision a mass exodus from Google, given its long-standing dominance and familiarity.
Over the years, Google has not only become the leading search engine but also a part of everyday language. Despite Microsoft's launch of Bing in 2009, nothing has dethroned Google. Microsoft boss Satya Nadella's testimony in Google's trial may have been an attempt to gain some leverage for Bing.
Professor Anu Bradford of Columbia Law School states, "The court may seek other ways to dismantle Google’s position as a default search engine but some of those remedies likely go beyond the facts driving this case." She notes that the EU's Digital Markets Act forces even Google's own Android phones to present users with a 'choice screen' for search engines, suggesting that this ruling could pave the way for similar regulatory demands in the future.
It Takes Time
Whatever the outcome, it’s unlikely to happen quickly. Historical precedents, such as Microsoft's legal battles in the late 1990s and early 2000s, suggest a long road ahead. After being found to have created a monopoly in 1999, Microsoft faced years of legal wrangling, ultimately resulting in a settlement in 2004.
Conclusion
The ruling against Google could bring about significant changes in how we interact with search engines and online advertising. While the immediate impact might be limited for the average user, the long-term consequences could reshape the tech landscape. As the legal process unfolds, we can expect more discussions and potential changes in how tech giants like Google operate.
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