What will happen in the battle between Google and the United States? The best and worst scenarios for the tech giant.

The U.S. Department of Justice weighs various scenarios to address Google’s prolonged antitrust conflict. It’s important to remember that antitrust practices are common in the United States, so it shouldn’t be surprising when certain commercial giants face lawsuits, whether from affected parties or interest groups that “monitor” to ensure that the concentration of supply within the economy doesn’t lead to unfair demand transfers. In recent years, there has been a strong tendency to target big tech companies, particularly for their data dominance and monopolistic practices, such as those of search engines like Google. In Google’s case, some protective lawsuits suggest resorting to an old practice from the Sherman Act, which involves forcing very large companies to break up, ensuring that their parts compete.

An analyst predicts it could take between three to four years before a verdict is reached.

Experts say a structural breakup is unlikely, but there is some risk concerning Google’s AI.

For years, Wall Street and even many Google employees have largely ignored the lawsuit filed by the U.S. Department of Justice (DOJ) against the company’s search business. It always seemed like a distant matter—perhaps unlikely to harm Google—so it wasn’t given much attention.

This week, however, it became a bit more real, and analysts closest to Google are now evaluating what could happen next amid the growing competition emerging in the AI war.

Recently, the Department of Justice presented a list of possibilities it was considering for handling the situation. On November 20, the DOJ will provide the judge in charge of the case with a more detailed version of what it wants Google to do, giving a clearer picture of what is truly at stake for the Mountain View company.

This comes after a ruling in August declaring that Google had maintained an illegal monopoly in the search and advertising markets.

The U.S. Considers Dividing Google to Halt Its Monopoly:

The measures proposed by the DOJ this week are broad in scope. “A mile wide and an inch deep,” said Bernstein experts in an investor note. In this note, analysts include the possibility of rescinding Google’s contracts with Apple and other partners to maintain its default search engine. The possibility of sharing some of Google’s search data with its competitors is also included.

Although the DOJ has not explicitly referred to a breakup of Google’s various businesses, it has mentioned “structural” measures for Chrome, Android, and Play, three products that the U.S. government claims Google has used to “gain an advantage” over its search engine.

Google, which has called the DOJ’s proposals “radical,” has announced plans to appeal the decision, which could delay any measures the judge, Amit Mehta, decides to take. Dan Morgan, Senior Portfolio Manager at Synovus, told Business Insider that he believes it could take up to three or four years before Google is forced to take any action.

The Department of Justice Tries to Level the Playing Field in Search:

Experts now believe that blocking Google’s default search agreements would be the minimum and likely not enough to level the playing field in the way the DOJ demands.

The same is true for implementing a “choice screen” that allows users to choose their preferred search engine the first time they turn on their device. Google introduced this feature for Android users in the European Union following an antitrust ruling in 2018, but it has proven ineffective in reducing Google’s market share in search in Europe.

Goodbye to Chrome and Android? The U.S. Considers Breaking Up Google:

The DOJ is also considering opening Google’s search index, thereby forcing the tech giant to share data, including details on how Google ranks the quality of web pages. Google experts are seeing this scenario as increasingly likely. The DOJ has pointed out that this could also include the models used for Google’s AI search functions.

Google might also be required to share auction data with advertisers about text search ads or monetization, and actions against Google’s advertising products, such as Performance Max, are not being ruled out either.

A Breakup Is “Unlikely”:

The most dramatic outcome would be a breakup of Google. Analysts who have been consulted consider this unlikely, although not impossible, for a total divestment of Chrome, Android, or Play.

“The catastrophic scenario of a complete breakup, like AT&T in the 1980s, doesn’t seem likely,” explains Morgan to Business Insider.

A structural breakup would be “an unlikely outcome,” and any measures would likely focus on search distribution, says Dan Ives, Managing Director and Senior Analyst at Wedbush, in an investor note that has also been published.

The AI Risk for Google:

As the U.S. Department of Justice has made clear, it doesn’t just want to punish Google for its past actions, but also prevent it from using its monopoly in the online search market to dominate the emerging AI market.

Google has spent the last two years fighting to reaffirm itself as a leader in AI against increasingly powerful rivals, like OpenAI (the developer of ChatGPT). Forcing Google to share data and redirect some of its AI products could reduce its advantage in the upcoming AI battle.

In a speech this week at The Information’s Women in Tech, Media, and Finance conference, Liz Reid, Google’s search director, acknowledged that the data Google holds gives it an advantage in both search and AI. “We have great data beyond the web, like products, maps, and sports data,” said Reid.

Sunshine CEO and former Google executive Marissa Mayer later emphasized this issue, stating that “Google owns all the data.”

The DOJ has also said it’s considering a proposal that would allow websites to opt out of contributing to Google’s AI training, as well as not appearing in AI-generated search results.

“In our opinion, the last thing Google needs right now in the broader AI battle is to fight with one hand tied behind its back by regulators,” said Bernstein analysts in their note. This is another reason why Google might be carefully considering how to appease the U.S. regulator. The company can propose its own corrective measures before December 20, 2024, and will likely do everything possible to avoid the worst-case scenario.

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Translated by: Ramón Armero

Commented by Dr. Ricardo Petrissans (italicized).