Google’s break-up has just begun.

In the past day, the US Department of Justice has begun outlining how it wants the ad, search and app store monopolist taken apart.

Judge Amit Mehta - the guy who ruled Google a search monopolist - is hearing the case and will deliver the plan around August.

Top of the list is selling its browser Chrome. Google Ad Manager [GAM] is likely to be carved off too, and the backroom $26.3 billion deal with Apple to monopolise mobile ads is headed the way of the Dodo.

“Your Honor, we are not here for a Pyrrhic victory,” the DoJ’s David Dahlquist said, starting the ball rolling.

“This is the time to tell Google and all other monopolists who are out there listening - and they are listening - that there are consequences when you break the antitrust laws.

"Google can compete, but it simply doesn’t want to compete on a level playing field.

“Google is now fearful of competing against rivals who will only get stronger with the proposed remedies in place.

“The remedies will allow all rivals to take the field and allow the block of ice to thaw.”

It’s been a busy 24 hours so this is a fast take of the developments.

The White House has weighed in, more than half a trillion in value has been lost, the future of AI is being decided, and we’re only just getting started.

White House onboard

In a signal of White House support, the administration’s new Assistant Attorney General Gail Slater made a statement yesterday: “We are not here to relitigate the case, we are here to ask the court to fix the harm from Google’s unlawful conduct. If Google's conduct is not remedied, it will control much of the internet for the next decade and not just in internet search, but in new technologies like artificial intelligence.”

Ars Technica wrote:

“It’s no secret that incentives at the federal level are shifting as the second Trump administration politicises the Justice Department to an unprecedented degree. Despite the new divisions, opinions are remarkably unified on the Google search case. The DOJ team has successfully made the case that Google is a monopolist, and now they have to enforce the law. The new conservative leadership sees Google as a principal source of the “censorship” of right-wing ideology, which they largely interpret as a downstream effect of Google’s undue market power.”

Ow, it hurts

Don’t think this matters? Google’s market cap has been in freefall since the start of the year, meaning more sleepless nights for CEO Sundar Pichai.

As I recovered from my hangover on January 1, Google was peaking at $2.4 trillion. Fast forward to today, and it’s fallen $625 billion, a near 26 per cent.

Sundar’s days are numbered…

Chrome’s gotta go

Among the demands flagged by the DoJ on day one were:

• Forcing Google to get rid of Chrome browser - the access point for 4.1 billion web users.
• Forcing Google to share the secret sauce of how search and even AI Overviews works to spawn new search and AI rivals, and
• Syndicating search and ad data for publishers to improve ad quality and reporting.

Jon Sallet, representing the US States that joined the DoJ case, said Chrome was a “massively attractive asset”.

“This doesn’t come up very often,” he said in a masterful understatement. I have been arguing for months now that the publishing industry should take it on.

The court heard it could be a spinoff, or the sale of it and its staff as a business unit. The DoJ argued that Chrome, under a different owner, would give new rivals an “opportunity to operate a significant gateway to search the internet, free of Google's monopoly control”.

Forget it - Google

Google began its arguments by attacking the break-up and saying nothing much needs to change.Lead attorney John Schmidtlein told the judge: “Google earned its market position through hard work and ingenuity. It won its place fair and square.”

A quick PS on the BS: That’s not what the court ruled. It said Google bought its supremacy, killed rivals, and suffocated publishers, so no-one else could grow…

Google did seem to concede on its Apple deal. It seems to think that losing that is inevitable. (That’s a big ouch to Apple as it’s 16 per cent of its profits.)

Watch Samsung

Google also seems to be accepting it’ll lose its $3 billion default deal to be the search on Samsung’s Android phones.

It pays the Korean phone giant an “enormous sum of money” every month to preinstall Google generative AI app, Gemini, on its phones and devices.

That’s despite Google’s being found to have violate the law twice for paying for being the default search tool, Bloomberg reported.

Peter Fitzgerald, Google’s VP of platforms and device partnerships, testified it had been paying Samsung since in January.

The two-year deal pays fixed fees as well as a a percentage of Google revenue from the app. That mirrors the Google deal.

The exact payoff wasn’t revealed, but the DOJ’s Dahlquist said it was an “enormous sum of money”.

In a separate case, it was revealed that Google paid Samsung US$8 billion between 2020 and 2023. I also revealed back in November 2023 how Google was willing “to f*ck over” Samsung to avoid Australia’s news media bargaining code.

You might remember that Aussie publishers then buckled and let Google off the hook by taking payoffs, sacrificing local publishers and a global precedent for pennies. 

Chrome’s future

Schmidtlein added that selling Chrome would be “far from simple” and would hurt the Chromium open-source project Google created and has funded for years.

Rumours in the search antitrust trial were that operating costs ~$4 billion-a-year, but it generated ~$250 billion in advertising inventory.

“The decree demands not only Chrome but also everything critical to Chromium's functionality,” Schmidtlein told the court.

“What does that even mean? They’re leaving it up to a technical committee, but there’s no clarity on what constitutes necessary assets.”

Save AI

Google also posted a blog post claiming that slowing it down will hand the future of AI to China.

It would “hamstring how we develop AI, and have a government-appointed committee regulate the design and development of our products,” claimed Lee-Anne Mulholland.

Mulholland, Google’s vice president of regulatory affairs, is everywhere the past few days. She been tagged as Google’s person “on the case” and looks like the sacrificial lamb.

“When it comes to antitrust remedies, the US Supreme Court has said that caution is key. The DOJ’s proposal throws that caution to the wind,,” she wrote.

“That would hold back American innovation at a critical juncture.

“We’re in a fiercely competitive global race with China for the next generation of technology leadership, and Google is at the forefront of American companies making scientific and technological breakthroughs.”

PS on the BS: Google’s been repeatedly laughed at over its flub in AI that’s ceded hundreds of billions in value to faster-moving more innovative rivals, notably OpenAI. It’s not leading.

What’s coming next

The break-up actions - known in legal jargon as remedies - will be hammered out over the next three weeks. We may see the first rulings around August.

There will then be appeals, though the court can rule that the break-up happens even while the appeals are being planned and fought.

It will literally decide the winners and losers in the $1.2 trillion global ad market, redraw the economics of the open web, and shift the power base of Big Tech.

Microsoft - parent of Bing and 49 per cent owner of OpenAI, will be back in court to support the DoJ.

Apple and Mozilla, who both get billions from Google, will be in court to support the search giant.

Awesome…