Will Obama Break Up Google?


Obama’s pick to head the Justice Department’s antitrust unit, Christine Varney, believes that Google has a monopoly in search and will soon have a monopoly in cloud computing and that the government should act aggressively to prevent monopolies.  So will she try to break Google up?

As background, here some quotes from Christine, as reported by Bloomberg:

For me, Microsoft is so last century. They are not the problem,” Varney said at a June 19 panel discussion sponsored by the American Antitrust Institute. The U.S. economy will “continually see a problem — potentially with Google” because it already “has acquired a monopoly in Internet online advertising,” she said…


Google is “quickly gathering market power in what I would call an online computing environment in the clouds,” she said, using a software industry term for software that is based on the Internet rather than in individual personal computers… “When all our enterprises move to computing in the clouds and there is a single firm that is offering a comprehensive solution,” Varney said, “you are going to see the same repeat of Microsoft.”

Varney said last June she was “deeply troubled” by Google’s acquisition of DoubleClick Inc., a maker of software for online advertising, and its proposed advertising alliance with Yahoo! Inc.

On a positive note, Christine thinks Google acquired its monopoly “lawfully.”

So will Christine try to break up Google or otherwise restrict the dominance of its monopoly?

In her remarks at the American Antitrust Institute, Varney advocated aggressive enforcement of antitrust laws to curb the conduct of individual companies that dominate an industry. She didn’t return a reporter’s telephone call seeking comment today.

White House spokesman Ben LaBolt said that Obama nominated Varney “to vigorously enforce the law” and “is confident that she can do so in a fact-specific and evenhanded way with every matter she will face.”

Hard to view this as anything but negative for Google.  A strident government attack on the company seems unlikely (and ill-advised), but Google’s future moves will almost certainly be more scrutinized and restricted than they have been to date.  That’s not good for shareholders.

See Also: Obama’s Antitrust Pick: Google Is The New Microsoft