The Justice Department’s Proposals for Breaking Up Google’s Dominance Won’t Work
The Department of Justice (DOJ) released its “Proposed Remedy Framework” for the Google antitrust case earlier this month, indicating that it is considering breakup measures for parts of Google’s business, alongside other strategies, to curb the company’s dominance. The efficacy of the recommendations is questionable. What is certain, however, is that there will be consequences consumers and manufacturers will incur from a less dominant Google.Â
The federal court case, referenced in the framework, was decided in August and held that Google is an illegal monopoly. In the decision, Judge Amit P. Mehta of the U.S. District Court for the District of Columbia argued, somewhat inconsistently, that Google had cemented its dominance by hiring the best people and innovating constantly, but also mainly because of the advantageous “default distribution” deals that made Google the default search engine on browsers and devices.
The DOJ report hints at a possible forced breakup of Google via “behavioral and structural remedies” to prevent the company from using its ownership of “products such as Chrome, Play, and Android” to its advantage. Other measures include preventing Google from paying other companies for “default distribution” and forcing the company to share its search data to benefit competitors.Â
Jessica Melugin, director of the Center for Technology and Innovation at the Competitive Enterprise Institute, tells Reason that a forced decoupling of Google and Android is unlikely given Android’s lack of direct involvement in the case. But considering the current antitrust atmosphere, “I no longer rule anything out,” she says.Â
The hodgepodge of possible remedies listed in the DOJ report is “a wish-list from rivals about what would make their lives easier,” Melugin adds. But perhaps more importantly, it does not account for the negative consequences consumers would feel.
A Google without Android would translate into higher prices for phones, Melugin notes, because of how “Google’s search advertising revenue internally subsidizes Android.” Consumers have already expressed their preference for Android phones with Google software; breaking them apart, Melugin says, would have the consumer bear the financial burden.
It will be up to Mehta to decide whether or not to implement the changes recommended by the DOJ and to what extent. Individually, each of the proposed remedies carries with i
Article from Reason.com
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