Will this be another milestone moment for the usa internet following the microsoft antitrust case?

Force Google to sell Chrome.

Following, $Microsoft (MSFT.US)$ After the antitrust case, the justice department of the usa took action again, asking the court to break it up. $Alphabet-C (GOOG.US)$ It hopes to resolve Google's monopoly position in the search engine market.

This is another milestone moment in the field of antitrust regulation in the usa since the federal district court ordered the breakup of microsoft in 2000. Just like the microsoft antitrust case back then, the usa government believes that only a breakup can effectively address the monopoly behavior of technology giants.

This demand also marks a new phase in the escalation of the antitrust lawsuit between the usa government and google. In October 2020, the usa department of justice, under the trump administration, filed an antitrust lawsuit against google, accusing it of expanding its dominant advantage in the search and advertising market through illegal business practices, hindering competition and stifling rivals. Before officially suing google, the usa department of justice had already conducted a two-year antitrust investigation into google.

At that time, the usa department of justice did not explicitly request the breakup of google in the lawsuit documents, but only asked the judge to impose "structural adjustments" on google, which was seen as giving google room to negotiate and settle with the government. However, after four years of litigation, the usa government decided to explicitly request the court to break up google.

After the biden administration took office, the usa government's antitrust stance became much tougher, appointing several antitrust hawk scholars to lead the department of justice and the federal trade commission (FTC) and other antitrust regulatory agencies, continuing and updating the antitrust lawsuits against google,$Amazon (AMZN.US)$、 $Meta Platforms (META.US)$ and other internet giants. In addition, more states joined the antitrust lawsuits against these giants.

Why does the usa department of justice demand the breakup of google? The lawsuit documents from the usa department of justice indicate that only by separating google's search engine from its traffic entrances (such as the chrome browser and android operating system) can normal market competition be restored. "The solution must be able to ensure and encourage the development of an unrestricted search ecosystem, attracting new competitors to join, promoting competition and innovation, and making competitors compete for the business of consumers and advertisers."

Choking Google's traffic entrance.

Why did the usa government specifically demand that Google sell the Chrome browser? Because this is Google's most important traffic entrance. Research data website Statcounter shows that Chrome holds about two-thirds of the global browser market share, and the default search engine for Chrome is undoubtedly Google, which brings immense search traffic to Google.

Although the usa government did not require Google to sell the Android operating system, it also made explicit demands regarding this traffic entrance: the Department of Justice requested the court to order Google not to favor its own company in the search engine settings of the Android operating system. If Google violates this regulation in the future, the usa Department of Justice will continue to require Google to split its Android mobile platform business.

In addition, the usa government has also imposed a clear ban on Google's third-largest source of traffic—buying traffic. Google is prohibited from continuing to pay large sums to secure the default search engine position on browsers like Apple's Safari and Mozilla Firefox. If Chrome is ordered to be sold, Google must also sever its operation of buying traffic. Currently, Google spends as much as 20 billion dollars annually on these traffic entrances.

Lawsuit documents show that currently, about half of the usa internet search traffic flows to Google through browsers and devices set to Google as the default engine, for which Google has paid, including Android phones, apple devices, and other third-party browsers; additionally, 20% of the search traffic comes from Google's own Chrome browser.

The appeal restriction measures indicate that the usa government plans to choke nearly 70% of the search traffic in the usa internet market directly, planning to allow network users to choose their search engine themselves, no longer letting this traffic flow to Google continuously through default settings. Of course, users can still continue to use Google, but Google will no longer enjoy its current special status.

The usa government's antitrust restrictions on Google not only pertain to search traffic but also the current ai competition. The usa government has clearly stated its demand for judges to prohibit Google from requiring website publishers to provide data for AI large model training through various means. Each website has the right to refuse to provide data to Google unless Google pays for the data to be used for training.

The ruling on whether to split up will be announced next year.

Of course, such measures to restrict traffic are unacceptable to google. Kent Walker, president of global affairs at google, stated that the proposed solution from the usa Department of Justice is wildly overboard in scope and could harm the usa and its global technology leadership. Google plans to present its own improvement proposal to the court next month.

Whether google will be broken up depends on the decision made next year. In April next year, judge Amit Mehta of the usa District Court for the District of Columbia will hold a hearing on the case to determine how to handle google's antitrust violations, with a ruling expected in August next year. However, it has already been determined by Mehta that google violated antitrust laws.

Judge Mehta ruled earlier this year that google pre-installs its search engine on Android devices and sets its own Chrome browser as the default search, making it nearly impossible for competitors to obtain the users and data needed to improve their search engines and compete. Moreover, google continuously enhances the quality of its search through massive amounts of search data, further strengthening its advantageous position in the search field.

Of course, regardless of the ruling, both sides are likely to appeal, leading to the District of Columbia Court of Appeals and possibly even the usa Supreme Court. The entire litigation process could take one to two years. During this lengthy litigation, google may still reach an agreement with the usa government to avoid leaving its fate in the hands of a judge.

Similar to the situation four years ago when the lawsuit was filed, the Biden administration is nearing its end, and Trump will return to the presidency in January next year. The antitrust lawsuit against google initiated by the Trump administration four years ago ultimately did not conclude until Trump's second term.

However, this is not good news for google. Because they have long been a thorn in the side of Trump and the usa Republican Party. American conservatives have consistently blamed google for controlling internet information and public opinion through its monopoly status. The Trump administration and his key advisor Musk would be happy to see google be broken up and lose its current dominance in online search.

The Chrome browser and Android operating system are two of google's core pillar businesses. Current google CEO Sundar Pichai was recognized by google's two founders for his role in developing the Chrome browser, which led to his promotion to senior management and ultimately the CEO position.

What would happen if google loses the antitrust lawsuit and is forced to sell its Chrome business? Clearly, losing the Chrome browser would severely impact google's advertising business. Search traffic is directly related to google's advertising revenue. Last year, nearly 60% of google's revenue, over 300 billion dollars, came from search advertising, which is why google is willing to spend hundreds of billions to acquire traffic entrances and provides the Chrome browser and Android mobile platform for free to obtain massive indirect revenue.

失去默认搜索引擎地位也会给谷歌竞争对手带来一定提振。当然，用户依然可以手动选择搜索引擎。根据Similarweb的统计数据，谷歌在美国搜索引擎市场的份额超过九成，而最大的竞争对手必应的市场份额甚至还不到6%。

反垄断带来创新机会

美国政府要求分拆互联网巨头谷歌，这无疑让人想到24年前如日中天的微软被下令分拆的的反垄断诉讼。值得一提的是，目前美国最高法院首席大法官约翰·罗伯茨(John Roberts)，当年正好就是代表各州起诉微软的诉讼律师。

2000年6月，同样是哥伦比亚特区的地区法院法官托马斯·杰克逊(Thomas Jackson)认定微软违反《谢尔曼反托拉斯法》，要求将微软拆分为两部分：Windows操作系统与Office等软件业务。法官在判决中认为，分拆是解决微软垄断行为的有效手段。

似乎每隔二十年时间，美国政府就会对一家科技巨头祭起反垄断大旗。上世纪七十年代末是 $IBM Corp (IBM.US)$ ，九十年代末是微软，现在终于轮到了谷歌。从硬件公司到软件公司再到互联网公司，正好代表了美国科技行业的时代特征。

美国政府从1969年开始调查IBM，1975年正式提起诉讼。美国政府指出，IBM为客户提供折扣价格的行为属于掠夺性定价，且该公司从硬件、软件到支持部门的纵向整合实质上是垄断性扩张。

Although both sides ultimately reached a settlement in 1982, ibm corp escaped the fate of being broken up. However, they had to abandon their previous competitive strategy and were forced to hand over the operating system and processors of personal computers to external companies. Without this antitrust lawsuit, there would not have been the personal computer era of the 1980s, nor the rise of microsoft.

Gates' mother and the chairman of ibm corp served as directors at the same charitable organization. She recommended her son's software company, microsoft, to ibm. As ibm and other bidders did not reach an agreement, they ultimately chose microsoft in 1980. At that time, Gates had not even produced his own software products; he spent 0.05 million dollars to purchase the DOS system, made slight modifications, and licensed it to ibm's personal computers. After its success, it was also licensed to other hardware manufacturers, ultimately becoming the dominant operating system in the pc industry.

Twenty years later, the main actor in the antitrust litigation became microsoft. Although microsoft eventually succeeded in its appeal and had the district court's breakup ruling overturned, Gates also resigned from the CEO position due to this lawsuit. Microsoft entered the Ballmer era, renouncing its aggressive expansion strategy under the shadow of antitrust issues, and shifted its focus to pursuing commercial profits. It was precisely because microsoft abandoned expansion that it provided space for other internet companies to rise.

Apple was also an important beneficiary of the microsoft antitrust lawsuit. During the antitrust investigation by the usa government, microsoft, in order to retain a competitor, agreed to invest 0.15 billion dollars in apple, which was on the brink of bankruptcy. This led to the legendary experience of Jobs reviving apple and achieving brilliance.

Looking back over the past century, very few american corporate giants have actually been broken up due to antitrust issues. In 1911, Rockefeller's Standard Oil Company was broken up into 34 companies, and as a result, the oil empire disintegrated; today's Mobil Oil Company is one of them. In 1945,$Alcoa (AA.US)$after eight years of litigation, the Aluminum Trust was forcibly broken up, which ended the era; now alcoa is one of them.

The last major industry giant that was broken up by the usa government was still$AT&T (T.US)$In 1984, telecom giant at&t was split into eight subsidiaries (one long-distance telephone company and seven regional telephone companies) after a 12-year lawsuit, marking the withdrawal of the telecom behemoth from the stage, and now the two major operators in the usa.$Verizon (VZ.US)$and $AT&T (T.US)$ Both are former members of the bell system.

More than twenty years ago, microsoft escaped the fate of being broken up, so what will happen to google now? In two months, trump, who hates google the most, is about to assume the presidency again. And his most trusted elon musk is also hostile to google's dominance in the internet plus-related field.

Editor/Somer