Antitrust Officials Plan to Break Up Google for Sale

The Justice Department is making moves to transform America’s most popular search engine into a public utility. This proposal is part of the department’s antitrust case against Google, aiming to make the company share its technology, data, and models with competitors at marginal cost. This approach mirrors tactics used against telephone companies in the 1990s, which ultimately stunted investment and competition. If applied today, it could negatively impact consumer welfare, innovation, and the U.S.’s leadership in artificial intelligence.

The requirements laid out are extensive, calling for Google to share its search index, user data, and research developments with rivals without significant financial gain. This directive raises concerns about stifling investment incentives and distorting the market by allowing companies to re-sell Google’s search results instead of developing their own technology.

The challenges of implementing such sharing requirements in industries with high fixed costs and low marginal costs are evident from past experiences. Disputes over cost allocation were prevalent when similar strategies were used with phone companies in the ’90s. The complexity of balancing costs and benefits poses a significant challenge that the Justice Department would likely face if the proposed Google breakup moves forward.

Additionally, Google might need to divest from Chrome and Android, as well as sever ties that make it the default search engine on Apple devices. The ripple effect of these changes could reduce competition in the emerging artificial intelligence market, limiting innovation and investment opportunities.

The argument against these proposed remedies lies in the potential negative implications for competition policy. We must remember that true competition is driven by innovation and investment, not by handicapping successful companies to benefit rivals. The Justice Department’s approach risks stifling innovation and consumer benefits rather than fostering a competitive landscape.

As discussions continue, it’s essential to consider the lessons learned from previous regulatory interventions in industries like telecommunications. The intended consequences may overlook unintended effects on innovation and consumer welfare. Ultimately, the goal is to enable healthy competition that drives progress and benefits consumers.