What would happen if Google loses its antitrust case?

The search giant could be restricted in dealing with Apple — or even see some apps split off

Google and the US Department of Justice faced off starting on Tuesday in a case that could determine how the search and advertising giant will need to run its business — and reach the masses.Gabby Jones/Bloomberg

It’s the most important antitrust trial for the tech industry in decades. But what are legal experts saying about the case, and what will it mean for consumers?

Google and the US Department of Justice faced off starting on Tuesday in a case that could determine how the search and advertising giant will need to run its business — and reach the masses. At issue is whether Google has used illegal means to maintain its dominant 90-percent market share in online searches.

The case reminds a lot of people of the government’s big antitrust case against Microsoft in the 1990s. And depending on how it goes, the outcome might, too — whether that means “behavioral restrictions” on the tech titan or a forced break-up (more on that below).

In opening statements, lawyers for the Justice Department and state attorneys general accused Google of making unfair deals to favor its search engine, such as paying Apple more than $10 billion a year to be the default on iPhones and Macintosh computers. Consumers could have benefitted if other search services protected their privacy better or offered other innovations, they argued.

Google’s lawyer said users overwhelmingly choose to use Google search because it’s the best service, while other rivals have failed to innovate. Regulators are trying to force consumers to use inferior products, he said.

The trial could take months, with top executives from Google and Apple expected to testify, and the verdict is not expected until next year. A second phase of the trial then would be required to weigh potential remedies.

But if US District Judge Amit Mehta finds Google guilty of violating antitrust law, what remedies would be in play? The options range from financial penalties to fundamental changes in Google’s apps and services, which could directly impact consumers.

Google has already been fined billions of dollars in antitrust actions in Europe, including a $4 billion penalty upheld last year over misusing the Android operating system to bolster its search business.

Justice Department lawyers have signaled that they would seek to go beyond fines, which haven’t made much of an impact on Google’s market position — or its balance sheet. The California search giant, now valued at $1.7 trillion, brought in $33 billion of profit in the first half of the year on $144 billion of revenue.

That could mean behavioral restrictions or the even more substantial option of so-called structural remedies, such as forcing Google to sell parts of its business.

In the current case, Google is accused of making improper deals with computer and mobile phone makers like Apple and Samsung to cement its search engine as the default option. A court could impose a restriction prohibiting Google from making such deals or require terms to create a more even playing field for competitors. In 2019 in Europe, for example, regulators required Google to give all Android users a choice of multiple search providers when they set up a new phone.

In the US case, that could leave consumers needing to choose which search service they preferred on their computers and phones, or even having their devices default to rival services like DuckDuckGo or Microsoft’s Bing.

Still, behavioral restrictions haven’t proven much more effective than large fines. After the EU made Google offer search choices on Android phones, the company’s share of the market remained over 97 percent. The incident now forms part of Google’s defense that its high search market share reflects the popularity of its service, not any improper deal-making.

Tech companies such as Google “have informational advantages and operational controls over the product that will almost certainly defeat any effort to write down what they should and should not do,” said Northeastern law professor John Kwoka, who previously served as chief economist to the chair of the Federal Trade Commission. Kwoka’s research has found “that on average remedies in actual merger cases have had little net effect, and behavioral remedies in particular have not limited firms much at all,” he said.

Also, US courts have been hesitant to impose such behavioral remedies in antitrust cases, law professor Rebecca Haw Allensworth at Vanderbilt University said. “It’s problematic because it asks the judge to potentially continuously engage in monitoring whether the conduct is happening,” she said. It’s also tricky because asking a company to help boost its competitors “is requiring the company to operate at cross-purposes, it’s creating a conflict of interest,” Allensworth said.

If restrictions aren’t the answer, the Justice Department may consider the kind of remedy it sought in the old Microsoft antitrust case: a break-up. Back then, the alleged problem was Microsoft leveraging its control of Windows software to take over the market for web browsers. The proposed break-up adopted by a US District Court in June 2000, but later rejected on appeal, would have split the company’s Windows unit off from the rest of its applications businesses. (In earlier eras, courts ordered Standard Oil and AT&T split up to cure antitrust violations.)

In the Google case, some antitrust experts said the government could seek to force the company to spin off its Chrome browser business. Chrome has a dominant share of web browsing on computers and Android mobile phones (though not on iPhones). As an independent company, Chrome might add a different search service as its default or make changing the default option simpler.

“The remedy has to fit with the theory of how the market was harmed and be commensurate,” said University of Tennessee law professor Maurice Stucke, who worked at the Justice Department on the Microsoft case.

A permanent split-up might fit better with current Supreme Court precedents than ongoing business restrictions, he said. “The court said judges shouldn’t be managing the day-to-day affairs of companies,” Stucke said. “That could cut in favor of a structural remedy that would require less oversight and rely more on market forces.”

Judge Mehta’s decision to limit the scope of the initial trial to Google’s possible wrongdoing and hold a second trial, if needed, to decide on a remedy should help whatever fix emerges withstand appeals better than the Microsoft split-up ruling, Howard University law professor Andrew Gavil said. (District Judge Thomas Penfield Jackson did not hold a trial on remedies for Microsoft and an appeals court panel noted that failure when it tossed the split-up plan, Gavil noted.)

“Another lesson from Microsoft is that the remedies should be proportional to the scope of any violation found — so a decision on remedies will have to await [Judge Mehta’s] decision on liability,” Gavil said.