HMM: Google break-up could turn Big Tech into Medium Tech.

The DoJ’s proposal shows how far the US government is willing to go to shift the balance of power in tech. Google is the first big loser in an industry-wide antitrust fight that has been brewing for years. If these sorts of penalties are meted out, the US tech industry will start to look very different. Big Tech could become Medium Tech.

A caveat: regulatory legal action is notoriously slow. The DoJ published its complaint in 2020 and Judge Amit Mehta found the company guilty this August. He has given himself until summer 2025 to make a decision. Google can then appeal. The DoJ is considering more options than forcing the sale of parts of the business. This is why the company’s share price has not plummeted. It remains just 14 per cent shy of the all-time high. Investors find it hard to price the risk of potential changes that may not even happen.

Still, Google is being tied up in legal battles just as its rivals are raising record sums to develop artificial intelligence. Google’s AI plans may not be in the crosshairs of this particular fight but they could be one of its casualties. The drag effect of government intervention can be long-lasting. China’s severe crackdown on its own tech sector in 2020 hobbled the sector’s growth.

I’m all for breaking up Google but trusting Washington to get the job done without unacceptable collateral damage sometimes feels like a stretch.