Labeling a corporation as an “illegal monopoly” is straightforward, but navigating the intricacies of regulatory actions presents significant challenges, as the U.S. government prepares to tackle the complexities associated with dismantling Google, often referred to as the internet’s spiderweb.

Google’s dominant position in the search engine market is well-established, maintaining a staggering 90 percent market share. The influence of Google is so pervasive that its name has become synonymous with online searching. As a result, its parent entity, Alphabet, stands as the world’s fourth most valuable company, boasting a market capitalization of $2 trillion.

There is no denying that Google holds a monopoly on search functionality and related “search text advertising” services. Nevertheless, it took the U.S. Department of Justice four years of investigation to substantiate claims that Google was exploiting this monopoly.

Recent Developments: In August, a judicial ruling opened the door for the Department of Justice (DoJ) to explore potential remedies, which were recently detailed in a 32-page document. This includes recommendations for both “behavioral” and “structural” adjustments—potentially leading to the fragmentation of Google into its individual components: the search engine, Chrome browser, Android operating system, Play app store, and advertising network. This kind of corporate breakup has not occurred in the U.S. since the 1984 separation of AT&T.

The challenge for the DoJ is significant, as the proposed solutions remain ambiguous, raising questions about how divestitures would enhance the experience for both consumers and businesses.

Consider the contentious issue of “preinstallation”—Google reportedly spent $26.3 billion in 2021 to secure its position as the default search engine on devices from manufacturers like Apple. If Google were to be broken up, would the separated entities continue to engage in similar financial arrangements? Furthermore, would consumers still opt for Google over alternatives like Bing, which is owned by Microsoft, a company with a greater market cap of $3.1 trillion? A similar scenario exists in the EU, where despite offering a “choice screen” for Android users, the vast majority still favor Google.

While the DoJ points to Google’s stronghold on the advertising search market as a means to charge excessively high prices for text ads and limit choices for advertisers, Google has countered that this legal initiative comes at a time when new AI-driven search platforms, such as ChatGPT and enhanced versions of Siri, are beginning to emerge.

One suggested remedy involves the requirement for Google to “make available” its “indexes, data feeds, and models” used in their search operations, thereby allowing competitors to develop their own search engines. However, this approach carries risks, including potential user privacy issues—a valid concern considering the sensitivity of personal search data. Google maintains it adheres to stringent security protocols, though there is no guarantee that less scrupulous entities would uphold similar standards.

Next month, the DoJ is expected to finalize its response to the court ruling, initiating a lengthy legal battle with Google. This protracted process may explain why Alphabet’s stock only dipped by about 2 percent following the news. Legal experts suggest that a court may only pursue a breakup if it is convinced that alternative measures would be ineffective. A more probable outcome could be a ruling prohibiting Google from spending billions to maintain its default status on smartphones, which could create an illusion of choice for consumers, even if their preferences still steer them toward Google.

Rio Tinto’s Strategic Acquisition

Addressing a potential premium of 90 percent raises eyebrows when acquiring a publicly traded firm; however, Jakob Stausholm, CEO of Rio Tinto, appears to have made a sound investment with a cash deal valued at $6.7 billion to purchase Arcadium Lithium.

Stausholm has termed this acquisition a “counter-cyclical expansion,” positioning Rio Tinto to capitalize on lithium, a resource critical for electric vehicle batteries and power storage, as he believes this is a strategic moment in the market cycle. While he acknowledges the uncertainty of timing, his analysis seems prudent. Revisiting May of the previous year, when Arcadium—comprising Australia’s Allkem and U.S. rival Livent—merged at an estimated value of $10.6 billion, highlights the current situation.

Since then, lithium prices have plummeted, dropping by 80 percent due to an oversupply in China and a decline in demand for electric vehicles. However, Stausholm is optimistic about an anticipated compound annual growth rate in demand exceeding 10 percent through 2040, suggesting that supply and demand will stabilize “fairly quickly.” If his projections hold true, he may well justify this premium.

Rio Tinto’s shares were stable at £50.48, but the company requires support from 75 percent of Arcadium investors for its proposed $5.85 per share acquisition. One minor shareholder, Blackwattle, has indicated it will oppose the deal, describing it as “opportunistic.” Despite Arcadium’s shares surging to approximately $5.50—up 31 percent—they remain below the proposed bid amount. As Stausholm noted, the market response from investors suggests confidence in his premium offer, barring unexpected challenges.

Labour’s Relationship with Small Businesses

The earlier rapport between Labour and the business sector seems to be fraying. In response to the new “Make Work Pay” legislation, the Federation of Small Businesses has labeled it a “crushed job, clumsy, chaotic, and poorly conceived,” citing the introduction of “28 new measures on to small business employers all at once” devoid of any substantive pro-growth focus. The cordial relationship appears to have soured dramatically, particularly before the anticipated budget actions hinted at by Starmergeddon.