The Justice Department is considering breaking up Google (GOOG, GOOGL) in a bold antitrust move, according to a report from Bloomberg. This comes after the tech giant lost a key antitrust case earlier this month, where a court ruled that Google monopolizes online search.
Former Assistant Attorney General of the Antitrust Division Bill Baer joins Catalysts to weigh in on the news and ways Google could be broken up to ensure fairness in the market.
“I think the case is very strong. You know, it’s the equivalent of a criminal trial where the jury has come back and found all sorts of bad conduct on Google’s behalf. And now we’re at really the sentencing phase. It’s a civil case, so it’s the remedy. How do you restore a market that Google has monopolized for decades and ensure fair competition?” Baer says. He explains that if Google loses the suit, the company will have to provide “meaningful opportunities” for other search engines and advertisers to compete in the market.
One way this could be accomplished is if the Justice Department requires Google to give up its user data, which it sells to advertisers.
“Making that data available to other search engines is one option. It’s possible you could separate the Android business or force them to divest Chrome. Those are two ways in which they’ve been able to maintain their monopoly. The bottom line, though, is in order to make the remedy effective, it has to be strong,” Baer explains. “It has to create opportunities for other search engines to compete for our eyeballs and also to have advertisers provide advertisers an alternative way of reaching us.”
For more expert insight and the latest market action, click here to watch this full episode of Catalysts.
This post was written by Melanie Riehl
Video Transcript
The Department of Justice considering a bold antitrust play potentially breaking up Google.
That’s according to a report out from Bloomberg and this comes after the tech giant lost a key antitrust case earlier this month when a court ruled that Google monopolizes online search here to weigh in is Bill Baer.
He served as the assistant Attorney General in charge of the US Department of Justice, the US Department of Justice’s Antitrust Division from 2013 to 2016, also the Director of the Bureau of Competition at the FTC and that was from 1995 to 1999.
All right, we made it through all that.
So, Bill Le le, let me get your thoughts on this latest report that we’re getting out here from Google.
How strong is this case?
In your view?
I think the case is very strong.
You know, it’s the equivalent of a criminal trial where the jury has come back and found all sorts of bad conduct on Google’s behalf.
And now we’re at really the sentencing phase.
It’s a civil case.
So it’s, it’s the remedy.
How do you restore, uh, a market that Google has monopolized for decades?
And ensure fair competition.
So uh the government is going to ask for it.
And I think the judge in order to make this remedy meaningful is gonna have to do something that allows competition to flourish.
Uh uh competition which has not been allowed to occur because of what the judge found Amazon had systematically done to maintain its monopoly.
OK. Bill, I’m, I’m hoping you can just operationalize this for me because I wanna understand Google searches existed essentially throughout my entire lifetime.
So if, if, if Google search is taken away from alphabet or broken up in some capacity, what does that look like?
And then who would own it?
Would, would it become a public entity potentially?
What are the potential outcomes of that?
So there are all sorts of different remedies that are possible.
Uh The key thing is that it not just be a go and sin no more remedy, which is what Google will want.
Um They’re gonna need to find a way to provide meaningful opportunities for other, their general search engines to offer their services to us, provide an outlet for advertisers who now are basically forced to use Google to do their search advertising.
One option would be to require Google to give up to others, all the data they have on how each of us individually searches.
That’s how Google makes some of its money, it is able to go to advertisers and say we’ve got all the data on bill, beer’s search habits.
Uh, and, um, uh, you know, uh, if you pay us, we will, uh, instantaneously direct advertising the bill.
Um, uh, that will make your advertising more efficient because they’re a monopolist.
They charge, uh, uh, uh, uh the advertisers who in turn charge us a whole lot more than if the market were competitive.
So, making that data available to other search engines is one option.
It’s possible you could separate uh uh the Android business or force them to divest chrome.
Those are two ways in which they’ve been able to maintain their monopoly.
The bottom line though is in order to make the remedy effective, it has to be strong, it has to create opportunities for other search engines to compete for uh our, our, our, our eyeballs and also to have advertisers provide advertisers an alternative way of reaching us.
But when it comes to, I guess, for investors at home, maybe trying to figure out how long something like this is going to take until we see some sort of remedy.
Is this something from your obviously extensive experience?
Is this something that’s going to take year, multiple years?
I is how should investors be thinking about this probe?
And ultimately the timeline of what it’s going to be until we get an end decision.
Fair question, tough to predict.
But number one, we’re going to have this remedy phase before the district court judge.
And I assume sometime in the next few months, he will issue a decision about, about what measures need to be introduced in order to make the search market competitive, but that’s subject to appeal.
And the Google will ask that the judge not require his ruling to go into effect until the courts have, have ruled on, on their appeal.
It’ll be up first to the district court judge or judge Mehta and then up to the Court of appeals and maybe the Supreme Court to decide whether there is a, a, a hold on implementing the remedy.
So if it goes up and if the remedy is stayed pending appeal, that could mean easily a year, a year and a half, two years to get all the way to the Supreme Court bill.
I want to switch gears slightly for the end of our conversation and get your take on the upcoming election.
You’re obviously the former Assistant Attorney General of the anti trust division for the US.
How are you thinking about the election and the potential for Kamala is obviously also a former, potentially becoming president and how that could impact antitrust more broadly for the next four years plus.
Well, if vice President Harris wins, I expect pretty much of a continuation of the status quo.
The Biden Harris team has tough minded enforcers in place.
They’ve gone to a whole government view of making sure consumers get the benefit of competitive markets.
If the election goes the other way there’s so much that’s unknown about what former President Trump would do.
And, uh, so I think if Harris wins, uh, it’s pretty much continuation of the status quo, which has been pretty effective, pretty pro pro consumer.
If Donald Trump is re-elected, who knows?
All right, Bill.
Thank you so much, really helpful information there.
I appreciate you joining us again.
That was Bill Baer, former assistant attorney general in charge of the US Department of Justice is anti trust division.
Thank you so much.
Thank you.
