Why Breaking Up Google Would Be Hard to Do

How far will Washington go?

The Justice Department has laid out potential remedies to stop Google from illegally monopolizing the online search business, and they include a nuclear option: breaking off parts of the tech giant.

It’s an important consideration for the Biden administration, which has made policing tech giants a priority. But pursuing a full-scale split would be legally risky.

The background: In August, the Justice Department won its antitrust lawsuit against Google over search. The presiding judge, Amit Mehta, declared the company “a monopolist” that took anticompetitive steps including paying Apple billions to be the default search engine on web browsers and smartphones.

Among the actions the Justice Department is considering asking for:

• Forcing Google to share some of the data that underpins its search results;

• Preventing the tech giant from entering into search engine deals like the Apple contract;

• Imposing “nondiscrimination” measures on Google products like Android and the Play app store.

But there was a phrase in the filing that caught many eyes: “structural remedies.” In antitrust lingo, that refers to concrete steps to change how a company operates, as opposed to “behavioral” punishments in which the corporation promises not to do something.

In other words: a divestment of a business.

The Justice Department wrote that it was considering ways to stop Google from using some of its products — such as the Chrome web browser, Play app store and the Android operating system — to illegally bolster its dominant search business. Critics of tech giants, including Tim Wu, a Columbia Law School professor and former Biden administration official, have called for a forced spinoff of Chrome or Android.

The Biden administration has talked a tough game on antitrust. It has pursued multiple cases against Google alone — the Justice Department is awaiting a verdict in a lawsuit over the company’s online advertising business — as well as lawsuits against Amazon, Meta and others.

At an event hosted by Semafor last month, Jonathan Kanter, the Justice Department’s antitrust chief, said that previous efforts to break up monopolists like AT&T were necessary. He added that his office was overseeing “some of those” kinds of cases now, though he didn’t elaborate.

But asking for a breakup could be a step too far. Legal experts said that the Justice Department would have to prove that lesser fixes wouldn’t address the underlying problem. And some courts have found that forced breakups were improper, most notably in the Justice Department’s case against Microsoft two decades ago.

“Do you ask for something really big, like a breakup, knowing that that’s tilting at windmills and very unlikely to be granted by the judge?” Rebecca Haw Allensworth, a professor at Vanderbilt Law School, told The Times.

What’s next: The Justice Department will make its formal requests by next month.

• In other antitrust news: CVS Health and UnitedHealth argued that Lina Khan, the F.T.C. chair, and two other commissioners should recuse themselves from the agency’s lawsuit against them and drug middlemen over insulin costs.

HERE’S WHAT’S HAPPENING

The U.S. deficit climbs to $1.8 trillion, the highest in three years. Tax revenues failed to make up for rising federal government costs and the burden of making interest payments on the country’s roughly $36 trillion debt, increasing the deficit by $100 billion compared with last year. The deficit is likely to grow, with both Vice President Kamala Harris and Donald Trump outlining plans that will cost trillions over the next decade and be financed by borrowing more.

Chinese stock markets tumble on economic stimulus jitters. The CSI 300 Index of Shanghai- and Shenzhen-listed shares fell more than 7 percent on Wednesday, reversing a two-week rally. The sell-off comes as investors hope that Beijing will detail its plans to revive the world’s second-largest economy on top of the monetary measures announced last month.

Google executives win the Nobel Prize in Chemistry for their work on proteins. Demis Hassabis and John Jumper of Google DeepMind won the award for creating AlphaFold2, an artificial intelligence tool that can map human proteins in minutes. They share the prize with David Baker of the University of Washington, for his breakthroughs on computational protein design that has advanced the discovery of new medicines. The award was announced a day after Geoffrey Hinton, a former Google A.I. researcher, won the Nobel Prize for Physics.

A $200 billion storm?

Florida is under one of its largest evacuation orders in the state’s history, with Hurricane Milton regaining strength on Wedneday as it barrels toward Florida. The Category 4 behemoth is expected to strike the Gulf Coast on Wednesday or early Thursday and could end up being the most economically damaging storm ever.

Even in an age of monster superstorms, Milton could be one for the record books. It’s approaching just as federal officials warned that Washington was fast running out of disaster relief funds.

The Tampa and Fort Myers regions could see property losses that together top $240 billion, analysts at Jefferies, the investment bank, said in a research note. That would make Milton the costliest hurricane in U.S. history — surpassing Katrina in 2005 ($192.5 billion).

Here’s the latest:

• Millions of residents have been ordered to flee and airports, including in Tampa and Orlando, have closed, or soon will.

• Businesses could be disrupted for days, and big companies including Target and Walt Disney World have shut or will curtail operations.

The storm is again highlighting America’s precarious insurance market. Even before hurricane season, Fed officials had singled out escalating costs for various types of insurance as driving inflation.

The new risk: that rising premiums, especially in climate-vulnerable California and on the Gulf Coast, are weighing on businesses, homeowners and lenders, and could prompt a wave of foreclosures.

Government agencies are also warning of a funding shortfall. Small Business Administration officials on Tuesday said the agency had less than $100 million in funding for new disaster loans for homeowners and businesses. The agency warned that unless Congress addressed the shortfall, it would “very soon” not be able to meet new applications.

And President Biden has said that the Federal Emergency Management Agency had enough money only to manage the immediate response.

The hurricanes are getting some attention on the campaign trail. In the aftermath of Hurricane Helene, disinformation online has marred relief efforts. Officials in North Carolina and at FEMA have warned about their safety amid an influx of false rumors and conspiracy theories, including a false claim by Donald Trump that FEMA has funneled disaster relief money to migrants.

Vice President Kamala Harris has defended the Biden administration’s response, and called Trump’s claims “the height of irresponsibility.” Still, climate change barely ranks as a top issue among voters, especially for Republicans.

A reminder of where the candidates stand on climate:

• Harris calls it a significant threat, and through the Inflation Reduction Act, has pushed for billions of dollars in spending for green-transition technology and disaster mitigation initiatives.

• Trump has threatened to gut the I.R.A., and has called climate change “one of the greatest scams of all time.”

“We’ve made it hard to go public.”

— Jamie Dimon. The JPMorgan Chase C.E.O. told Bloomberg Television that British and American regulators had made it too hard for companies to execute an initial public offering.

A question of cost for Harris’s big new proposal

Vice President Kamala Harris spent Tuesday on a media blitz that included interviews on Howard Stern’s radio show, “The View” and “The Late Show With Stephen Colbert.”

The discussions largely stuck to safe political terrain. But Harris, who has been criticized for not spelling out detailed policies or doing many interviews at all, delivered a specific new idea: a proposal to cover health care at home, potentially financed by going after high drug costs.

What Harris wants to do: cover long-term care at home for people on Medicare. The number of Americans needing home care is expected to grow significantly as the population ages and lives longer, but anything that lasts more than a few months is “the biggest gap in Medicare,” David Grabowski, a health policy expert at Harvard, told The Times.

It’s worth noting that the 2024 Republican Party platform also mentions “at-home senior care” as a policy priority.

Harris would finance the hugely expensive plan in part by going after drug middlemen. Such a proposal could cost hundreds of billions of dollars. But her campaign says that it can find funding by cracking down on pharmacy benefit managers, companies that negotiate prices with drug makers for employers and governments but have been accused of driving up prices to pad their profits.

Mark Cuban, a high-profile Harris backer whose Cost Plus Drugs venture is trying to bypass pharmaceutical middlemen, supported the idea. “However big you think this is for healthcare,” he wrote on X, “it’s far, far bigger.”

Donald Trump’s plan on drug pricing is less clear. The Republican candidate hasn’t focused on the topic during his campaign, but last week he reversed his position on tying drug prices to what other wealthy countries pay.

• In other election news: Democrats are said to be worried that Harris isn’t winning over working-class voters in battleground states, though both campaigns are spending more time, money and energy in Pennsylvania than anywhere else. Also, Bob Woodward’s latest book, citing an unnamed aide, reports that Trump has repeatedly spoken with Vladimir Putin since leaving office.

THE SPEED READ

Deals

• Alimentation Couche-Tard, the Canadian convenience store operator, is said to have raised its takeover bid for Seven & i, the owner of the 7-Eleven chain, to $47.2 billion. (Bloomberg)

• Cerebras Systems, a maker of chips for artificial intelligence, is reportedly likely to postpone its I.P.O. as a national security review of an Emirati firm’s investment in the company drags on. (Reuters)

• Rio Tinto agreed to buy Arcadium Lithium, a major producer of a key commodity for electric vehicles, for $6.7 billion. (WSJ)

• Pfizer’s C.E.O., Albert Bourla, is said to plan a meeting with Starboard Value, the activist investor looking to shake up the drug giant. (FT)

Elections, politics and policy

• Crypto.com sued the S.E.C. after the regulator indicated that it might take the cryptocurrency exchange to court for operating as an unregistered broker-dealer. (Bloomberg)

• “Mexico Wants to Curb Chinese Imports With Help From U.S. Companies” (WSJ)

Best of the rest

• CBS News’s rebuke of the anchor Tony Dokoupil over his interview with the writer Ta-Nehisi Coates was reportedly criticized by Shari Redstone, the controlling shareholder of the network’s parent company, Paramount. (WSJ)

• A new HBO documentary purports to have discovered the identity of Satoshi Nakamoto, the pseudonymous creator of Bitcoin — and argues why that matters. (NYT)

• “The Turf War Between Tennis and Pickleball Is Escalating” (WSJ)

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