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The Government's Latest Antitrust Case Against Google Could Be the Biggest in Decades

A federal victory could drastically alter the global search market and lead to more o♉ptions for consume🔜rs

Google's search engine

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The U.S. government's latest antitrust case against Google (GOOGL, GOOG) could be the biggest case against big tech in decades, drawing parallels to its showdown with Microsoft (MSFT) in the 1990s, with the potential to drastically alt💮er 𒁏the internet search market.

Key Takeaways

  • The government's lawsuit against Google could be its biggest antitrust effort since it unsuccessfully took on Microsoft in the 1990s and early 2000s.
  • Federal regulators have alleged for years that Google engages in anticompetitive practices in the search and digital advertising markets.
  • In the event of a federal victory—or a Washington-enforced breakup of the tech giant—consumers and internet users could eventually benefit from a wider option of search engines.
  • Federal regulators have historically gone after some of the biggest companies of the day, including Microsoft in the 1990s and IBM and AT&T in the 1970s.

Proceedings are set to begin in an antitrust case Tuesday that will pit the U.S. government against one of the world's biggest tech giants.

In a lawsuit filed almost three years ago by the Justice Department (DOJ), regulators alleged Google's dominant position in the internet search market has created barriers to entry and harmed competition. Google has protected its dominant position throug🐎h lucrative deals with wireless carriers and smartphone ma🦹kers, the suit claims.

𓃲 The outcome could drastically alter how Google operates its search engine and change the makeup of the global search engine market in unprecede🌃nted ways.

In the event of a federal victory, consumers and internet users could eventually benefit from a wider option of search engines as new competitors emerge to challenge Google's market dominance.

A federal victory could also force Google to amend its lucrative contracts with smartphone makers like Apple (AAPL) and Samsung. Regulators have targeted these contracts as anti-competitive, as they position Google as the default searc✱h engine on many devices and require smartphone makers to preinstall Google appജlications like Gmail, Chrome, and Maps.

In another suit filed against Google this year, the DOJ alleged the former's anticompetitive practices date back at least 15 years and said the company has repeatedly quashed competition by acquiring technology startups that could have offered competing products.

Google Dominates Market Share

In response to the allegations, Google has said it competes on merit and that consumers have the option of navigating to other se🐟arch engines.

"People don’t use Google because they have to—they use it because they want to. It’s easy to switch your default search engine—we’re long past the era of dial-up internet and CD-ROMs," said Google's president of global affairs Kent Walker, in an interview with CNN Business.

Google's namesake product—its search engine—has enabled its parent company, Alphabet Inc., to become one of the world's most valuable companies with a market cap exceeding $1.7 trillion. Alphabet earned roughly half its $283 billion in revenue last year from its search business.

Since launching its universally recognized search engine, Google's online database has grown to encompass hundreds of billions of web pages and is well over 100 million gigabytes.

Almost 90% of all internet searches in the U.S. are made through Google. Globally, that share rises to 93%. Roughly 8.5 billion Google searches are made worldwide every day.

What a DOJ Victory Would Mean for Consumers

A federal victory could substantially reduce Google's influence over the search market or force a breakup of the tech giant altogether. Over time, consumers could eventually benefit from a wider option of search engines as new competitors emerge.

While Google's influence would not drastically fade overnight, the emergence of new competitors would effectively end Google's near-monopoly status over the global search market. This could happen faster if Google is split up into separate companies—similar to the breakup of AT&T in the 1980s—with each aiming to create its search engine and applications.

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