Google faces prospect of restructuring following antitrust case

Google could be forced to implement “behavioral and structural remedies” designed to limit the tech giant’s monopoly on online searches, after the Department of Justice (DoJ) said in a court filing it is considering several measures following a landmark court decision in August that ruled that the company was in violation of US antitrust laws. The DoJ’s 32-page filing comes on the heels of another defeat for Google parent company Alphabet after a California court ruled that the company had to open its Android operating system to competitors.

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The details: The potential remedies could force Google to sell key products, share data, and open access to platforms in what could mark the largest shake-up in the tech sector since an antitrust ruling was issued against Microsoft over two decades ago, the Financial Times reports.

Google would also be prevented from leveraging products such as Chrome, Google Play, and Android to give its search engine a step up over competitors and newcomers to the search engine market. A ban on Google’s USD 20 bn annual agreement with Apple to act as Safari’s default search engine is also on the table, alongside other measures that would force the firm to share data while restricting it from using search results to train AI models and products.

The next checkpoint: US District Judge Amit Mehta, who is presiding over the case, has scheduled hearings on the DoJ remedy requests for April 2025, with a ruling expected by August. Google vowed to appeal and may take the case all the way up to the US Supreme Court, suggesting that the legal battle could drag on for years.

This could be a significant turning point — not just for Google: The reforms could, if implemented, herald major changes in the online queries market where Google currently holds some 90% of market share. The DoJ’s campaign, led by antitrust chief Jonathan Kanter who is also pursuing a separate case against Google’s ad tech division, could mark a turning point for Big Tech regulation after a court overturned the previous antitrust ruling against Microsoft on appeal.

Google described the measures as “radical and sweeping,” arguing that they go beyond the scope of the legal case brought against it, and that they threaten “consumers, businesses and American competitiveness.”

Market reax: Shares of Google’s parent company Alphabet closed down 1.6% yesterday, paring losses after falling as much as 2.8% during intraday trading, according to Bloomberg.

MARKETS THIS MORNING-

Asia-Pacific markets are mostly up in early trading today, led by the HangSeng Index, which is up c.2.4%. Wall Street futures are mixed after the S&P 500 and Dow Jones hit record highs during yesterday’s trading session. S&P and Nasdaq futures are just slightly in the red, while Dow Jones futures indicate the market will open in the green.

THE CLOSING BELL-

The EGX30 rose 1.1% at yesterday’s close on turnover of EGP 4.1 bn (0.1% below the 90-day average). International investors were the sole net sellers. The index is up 25.2% YTD.

In the green: Cleopatra Hospitals (+7.7%), Elsewedy Electric (+4.8%), and Telecom Egypt (+3.6%).

In the red: Credit Agricole (-1.4%), Juhayna (-1.3%), and CIB (-1.2%).