The potential split up of Google that’s been proposed by the US Department of Justice (DOJ) could weaken the company, and thus the position of the US in its tech war with China, said former President Donald Trump, who suggested he may not break up the company if he wins the presidency again in November.
In comments made while speaking Tuesday at an event with Bloomberg News during a meeting of the Economic Club of Chicago, Trump said, “China is afraid of Google,” according to a report of the event in the New York Times. He went on to wonder whether splitting Google would “destroy” it, and thus also diminish the US competitively against China. The US and China are at war over tech supremacy, and the US has imposed trade restrictions on the export of technology to the country.
Trump’s comments are somewhat ironic, given that it was his administration that brought an antitrust suit against Google in 2020, weeks before the presidential election. The DOJ argued at the time that Google had illegally maintained a monopoly in the online search business by paying companies like Apple to make it the default search engine on smartphones and in web browsers.
Last week, the notion that Google would be split up became more realistic after the release of a proposal by the DOJ, which said it “is considering behavioral and structural remedies that would prevent Google from using products such as Chrome, Play, and Android to advantage Google search and Google search-related products and features … over rivals or new entrants,” according to a court filing.
The department said that Google’s longstanding control of the Chrome browser, with its preinstalled Google search default, “significantly narrows the available channels of distribution and thus disincentivizes the emergence of new competition.”
The DOJ also said it would target Google’s revenue-sharing agreements with device makers and telecom companies that spurred the case in the first place in its remedies. These deals have kept Google as the default search engine on the vast majority of devices globally, effectively blocking competitors from gaining market share.
Google did not immediately respond to a request for comment Wednesday, either on Trump’s remarks, or on its position on the DOJ proposal.
Two Googles better than one?
That split now seems more likely if Vice President Kamala Harris wins the upcoming election, as Democratic administrations traditionally have been on the side of consumer protection and thus splitting up companies with too much power, noted Brad Shimmin, chief analyst, AI and data analytics, at Omdia. Republicans, on the other hand, tend to favor letting large corporations with monopoly market shares remain as they are, he said.
Shimmin and other experts said a split like the one that the DOJ has proposed would offer consumers and enterprises more choice in terms of which technology they use and/or bundle with products. “I think that capitalism thrives upon a bit of chaos and diversity,” he said, adding that breaking up Google would be a win for consumer protection.
“Anytime you have a very solid position with a dominant player, it really quells innovation and quells enrichments, and you end up with a zero-sum game,” he said. That’s because once a company has a dominant position that can’t be challenged, there is little accountability for product and/or service quality, so “companies simply test the bounds of tolerance” with their customers, Shimmin said.
Power corrupts; regulation corrects
While Trump might favor ensuring Google plays fair instead of breaking up the company, according to his comments reported by the Times, this may not be enough to encourage fair competition, noted another industry expert.
“The fundamental problem with big tech is the economic perversities of monopoly power,” said John Bambenek, president at Bambenek Consulting. “Sure, regulation can help, but if the problem is too extreme, splitting companies up is the only solution to maintain viable capitalism.”
Indeed, capitalism always runs the risk of one company playing the fair market game better than others, which means that regulators sometimes need to step in to rebalance the system. This doesn’t mean the US will lose its edge against global competitors like China, even if that country has more control over its technology development due to its government structure, Bambenek said.
“Communist and autocratic economies, of course, take a different approach,” he said. “However, I still believe we can have both a free market with competition and still be innovative and maintain our tech dominance.”