Google’s Chief Warns That Breakup Proposals Could Be Challenging for Business

On Wednesday, Google CEO Sundar Pichai addressed a federal judge, stating that the government’s plan to dissolve the company would significantly obstruct its operations as it seeks to implement changes to remedy alleged illegal monopolies in online search.

Judge Amit P. Mehta of the U.S. District Court for the District of Columbia ruled last year that Google had violated laws to sustain its search monopoly. This month, he held a hearing to establish a remedy for addressing these unlawful practices.

As the company’s second witness, Pichai argued against aggressive governmental solutions, including the sale of Google’s widely-used Chrome web browser and mandates to share data with competitors. He expressed concern that such proposals would force the company to scale back on investments in new technologies in order to redistribute profits to rivals with minimal fees.

“No combination of bailouts can replace what we have invested in R&D over the past three decades and our ongoing innovation to enhance Google search,” he stated, referring to research and development.

Pichai is expected to testify throughout a landmark three-week hearing. The tech industry is currently racing to develop internet products powered by artificial intelligence, and new restrictions on Google’s business could energize its competitors and hinder its own progress.

This case against Google marks the first substantial examination of the U.S. government’s efforts to rein in the extensive power held by commercial entities in the online information landscape. Recently, a federal judge in Virginia concluded that Google also holds a monopoly over various online advertising technologies.

The Federal Trade Commission is engaged in a legal battle with Meta, scrutinizing whether the acquisitions of Instagram and WhatsApp unlawfully diminished competition. Additional federal antitrust actions against Apple and Amazon are anticipated in the coming years.

The Justice Department initiated a lawsuit against Google regarding search practices during President Trump’s first term in 2020.

At the 2023 trial, government attorneys contended that Google has effectively highjacked other search engines by compensating companies like Apple, Samsung, and Mozilla to ensure that its search engine appears as the default on browsers and smartphones. Evidence submitted indicated that this amounted to $26.3 billion in payments in 2021.

In August, Judge Mehta expressed opposition towards the company. Last week, he conducted a three-week hearing aimed at determining an appropriate relief strategy.

The Department of Justice’s suggestions are extensive. The government has asserted that Google must divest Chrome since user queries are automatically directed to its search engine.

During approximately 90 minutes of testimony, Pichai emphasized the company’s significant investments in Chrome, citing its effectiveness in safeguarding users against cyber threats. When government attorneys probed whether future browser owners would manage cybersecurity, Pichai responded assertively, drawing on his deep knowledge of the field.

“Based on my extensive expertise and the understanding of other companies’ capabilities regarding web security, I can confidently discuss this,” he noted.

The government also desires that Google provide search result data to its rivals, a move that would grant other search engines access to information about user searches and clicked websites.

Pichai criticized the proposal for mandatory data sharing, suggesting it effectively threatens the company’s intellectual property, enabling others to reverse-engineer its comprehensive technology stack.

In contrast, Google’s proposal is more limited. He stated that the company should be permitted to continue compensating other businesses for search engine placements, with some arrangements open for annual renegotiation. He also emphasized that smartphone manufacturers should have greater autonomy in selecting which Google applications to install on their devices.

Judge Mehta inquired how other search engines might compete with Google.

“We can hardly rely on the notion that ‘the best product wins,'” Pichai later remarked.