The Justice Department aims to dismantle one of the most influential companies in the U.S. after a September court decision determined that Google has breached antitrust regulations. A decline in the shares of Alphabet, Google’s parent company more than 5% last Thursday as prosecutors proposed changes that would significantly impact the operational procedures of the company.
In September, U.S. District Judge Amit Mehta concluded that Google has unlawfully dominated the search sector by making large payments to maintain its position as the default search engine on different smartphones and web browsers.
In addition to demanding an end to these practices, the DOJ has also looked forward to preventing Google from designating itself as the default search option on the Pixel smartphone line. Most significantly, the agency has requested that the judge compel the company to divest its flagship Chrome browser. Class C stock of Alphabet saw a decline of 4.5% at the end of the day and it further continued to decrease in after-hours trading.
In reaction to this, Chief Legal Officer Kent Walker has mentioned that the proposed change could jeopardize the safety and privacy of Americans and hinder the investments of the company in artificial intelligence. He in a statement released on the website of the company expressed that the strategy of DOJ would result in preceded governmental overreach that would negatively impact the American developers, consumers and small businesses.
Also, it can threaten the nation’s global economic and technological leadership at a vital moment. Interestingly, the ruling concerns the anticompetitive payments which have been labelled as ‘traffic acquisition costs’ by Google, can actually benefit the company financially.
Whether Judge Mehta will sanction the proposed remedies remains to be seen a decision is expected in 2025 August, and Google is yet to file an appeal. It is uncertain how the upcoming administration of Presential elect Trump will perceive the case.
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