Google Faces Renewed DOJ Pressure to Sell Chrome, Potential Android Split Looms

Key Takeaways

• In 2000, a U.S. court ordered Microsoft to split into two separate entities to remedy its monopolization of the software market.
• However, a year later, an appeals court overturned the order, and Microsoft remained a single business.
• For the first time since then, the Department of Justice seeks to break up another Big Tech monopoly, this time, Google.

After the U.S. Department of Justice (DoJ) won a landmark courtroom victory in its efforts to crack down on Google’s search monopoly, prosecutors asked Judge Amit Mehta to force Google to spin off Chrome.

Now, under the Trump administration, the Justice Department has reiterated that demand.

DOJ Doubles Down on Google Breakup

In a Revised Proposed Final Judgment submitted to the court on Friday, March 7, prosecutors “reaffirmed that Google must divest the Chrome browser.”

Referring to the browser as “an important search access point,” the proposal argues that spinning it off would “provide an opportunity for a new rival to operate a significant gateway to search the internet, free of Google’s monopoly control.”

While there has been some speculation that the new administration could relax antitrust enforcement, the DOJ’s continued commitment to breaking up Google suggests Big Tech won’t get a major break under Trump.

However, there is no guarantee that Judge Mehta will comply with prosecutors’ requests.

Operating System Antitrust Concerns

Google’s latest antitrust dispute echoes the earlier U.S. vs. Microsoft, in which prosecutors sought to split Microsoft into two separate businesses. The comparison raises an important question: can the government succeed in breaking up Google when it failed before with Microsoft?

Following a series of DOJ and Federal Trade Commission (FTC) antitrust actions throughout the nineties, Microsoft finally ended up in court in 1998 to face allegations that it had abused its dominance in the market for PC operating systems.

The central charge was that by bundling Windows and Internet Explorer together, Microsoft had created an unfair advantage over rival browsers.

As in the Google Search case, the DOJ’s argument rested on users’ tendency to rely on the default configuration of the respective operating systems.

In the Windows case, that meant using Internet Explorer as the default browser. For Android and Chrome, it meant using Google as the default search engine.

In 1998, the DOJ argued that the best way to prevent Microsoft from abusing its PC operating system monopoly was to spin off the Windows unit as a separate business, removing the advantage it maintained for its products.

A quarter of a century later, the DOJ and many of the same states involved in the Microsoft case are making the same argument again. As long as the same company runs Chrome and Google Search, they claim that Google can’t be trusted to provide a level playing field for other search providers.

In addition to seeking to divest Chrome, the government also wants to weaken Google’s grip on the Android operating system.

In their request for remedies, prosecutors asked Judge Mehta to give Google an ultimatum: either spin off the operating system or prohibit Google from making its services mandatory on Android phones.

U.S. vs. Microsoft: What Happened?

Although the judge in the initial trial conceded to the DOJ’s requests and ordered the breakup of Microsoft’s business in 2000, the company managed to successfully appeal the decision.

In 2001, a D.C. Circuit Court overturned Judge Thomas Jackson’s ruling and sent the case back to the lower court to be presided over by a different judge.

While the appeals court agreed with the jury’s verdict that Microsoft had violated provisions of the Sherman Act, it overturned Judge Jackson’s remedies and issued a decision that “drastically altered the District Court’s conclusions on liability.” 

The Circuit Court’s decision reframed the case in Microsoft’s favor. As a result, the DOJ ultimately opted to settle the matter rather than continue to pursue a breakup of the business.

Implications of Microsoft Settlement

While the 2001 settlement put an end to many of the tactics Microsoft had allegedly used to suppress competition, critics argued that the firm’s successful appeal of the original breakup order represented a precedent-setting failure of antitrust law.

A decade later, legal scholars concluded that the settlement “was not enough to keep [Microsoft] from abusing its monopolistic power and does too little to prevent it from dominating the software and operating system industry today.”

Challenges to Government Antitrust Complaints

Since the Sherman Antitrust Act was passed in 1890, the U.S. government has only succeeded in splitting up a handful of monopolies.

The last time it did so was in 1982, when AT&T was broken up into seven regional companies. This eradicated the firm’s nationwide monopoly and permanently altered the American telecommunications industry.

Enforcing corporate divestment is difficult because the government must prove that a company is not only dominant but that it has engaged in anti-competitive practices.

Having a large market share is not inherently illegal, so each lawsuit must focus on specific actions that harm competition, which can be difficult to prove.

As the Microsoft case demonstrates, judges have traditionally been reluctant to enforce corporate breakups, preferring less severe remedies even when they do find that companies have abused their dominance.

Big Tech Breakups Back on the Agenda

In the 21st century, calls to break up a handful of Silicon Valley giants, including Amazon, Apple, and Google, have highlighted the gatekeeper status these firms maintain over their respective digital ecosystems. 

The DOJ’s request in the Google case represents the first serious attempt to break up a Big Tech giant since Microsoft. 

However, Google isn’t the only company facing the prospect of a breakup order.

In March, the DOJ warned Apple that it may seek the divestment of part of its business as a remedy to restore competition after it sued the firm for monopolizing the smartphone market.