Alphabet’s Chrome browser may be valued at approximately $20 billion (around Rs. 1,68,762 crore) if a judge approves a Justice Department initiative to sell the asset, marking a significant milestone in the U.S. government’s efforts to regulate one of the largest tech firms globally.
The Justice Department intends to present its case to a judge who found in August that Google violated antitrust laws by monopolizing the search market. They are requesting measures concerning artificial intelligence and its Android mobile operating system, according to sources familiar with the proposal.
Antitrust officials, alongside participating states, are likely to recommend on Wednesday that federal judge Amit Mehta enforce data licensing stipulations, according to insiders who asked to remain anonymous due to the confidential nature of the discussions.
If Judge Mehta accepts these recommendations, the emerging framework could significantly alter the landscape of online search and the expanding AI sector. This case originated during the Trump administration and has continued under Biden, representing the most assertive action against a technology corporation since the government’s failed attempt to dismantle Microsoft two decades ago.
Google’s acquisition of the world’s predominant web browser is critical for its advertising business, allowing the company to track user activity and tailor promotions effectively, which constitutes a major revenue source. Furthermore, Google has leveraged Chrome to promote its flagship AI product, Gemini, which aims to evolve into an intelligent assistant that users can interact with throughout their online experience.
If the sale proceeds, analysts predict that Chrome could be valued between $15 billion (about Rs. 1,26,571 crore) and $20 billion (roughly Rs. 1,68,762 crore), considering its user base of over 3 billion monthly active users, according to Bloomberg Intelligence analyst Mandeep Singh.
The potential offer for Chrome may hinge on prospective buyers’ ability to integrate the browser with additional services, said Bob O’Donnell of TECHnalysis Research. He noted, “It’s not directly monetizable. It serves as a gateway to other things. It’s unclear how to evaluate that from a direct revenue-generating standpoint.”
Lee-Anne Mulholland, Google’s vice president of regulatory affairs, criticized the Justice Department’s approach, stating it reflects a “radical agenda” beyond the legal issues at stake. She expressed concerns that government intervention could negatively affect consumers, developers, and the United States’ technological leadership at a critical juncture.
The Justice Department refrained from commenting on the matter.
Chrome Access
Antitrust officials argue that selling Chrome is imperative since it is the most widely used browser globally and a crucial entry point for accessing Google’s search engine. If the current solutions do not foster a more competitive atmosphere, the government maintains the option to revisit the necessity of a Chrome sale later.
According to StatCounter, a web analytics service, Chrome holds approximately 61 percent of the U.S. market share. Over the past three months, government attorneys have engaged with numerous companies to prepare their recommendations. Some proposals may evolve as states continue to critique the proposals.
Insiders indicated that antitrust enforcers have scaled back on pursuing a more drastic option to divest Google’s Android business.
Alphabet’s Google Faces Antitrust Struggles: Legal Analysis
Eric Schmidt, former CEO of Google, emphasized the convenience of Chrome, which is free to users and streamlines interactions with Google products. He commented on CNBC that breaking up such companies won’t fundamentally alleviate public frustrations with them.
Google noted in a recent blog post that if Chrome were owned by other companies, their lack of incentive to heavily invest in the product might lead to changes in its business model, potentially reducing its availability without cost.
Google Appeal
Following a ten-week trial last year, Judge Mehta’s ruling in August concluded that Google engaged in unlawful behavior in the online search and search text ads markets. The company has announced plans to appeal the decision.
A two-week hearing is scheduled for April, where the judge will evaluate the necessary changes Google must implement to rectify the identified illegal activities. A final ruling is expected by August 2025.
The Justice Department and participating states have recommended that Google should be mandated to license its search results and provide websites with more choices to prevent their content from being utilized by Google’s AI products.
Additionally, proposals are set to recommend that Google separate its Android operating system from its other services, including search and the Google Play mobile app store, which are currently bundled together. Increased transparency for advertisers and greater control over ad placements are also expected to be part of the recommendations.
Previous filings from the Justice Department and state attorneys general included these options, along with a prohibition on exclusive contracts central to the case against Google.
All potential spinoff plans would hinge on identifying a suitable buyer. However, major companies like Amazon.com Inc., which are also under antitrust scrutiny, could find such a transaction complicated. Singh expressed skepticism about the likelihood of a spinoff occurring but mentioned possibilities such as OpenAI, which could integrate an advertising business alongside a consumer chatbot service.
Analyst Evelyn Mitchell-Wolf noted that a merger with a U.S.-based AI company could navigate government scrutiny more readily than involving another major tech player. This might be welcomed as a move toward fostering AI innovation and enhancing the U.S.’s competitive stance in the global AI arena.
AI Overviews
Google has begun showing AI-generated answers at the top of its search results, dubbed “AI Overviews.” Though websites can choose to opt-out of providing data for Google’s AI models, doing so may lead to decreased visibility in search rankings, which can severely hamper customer engagement.
Publishers have voiced concerns that the AI Overviews diminish traffic and revenue opportunities, as users frequently do not navigate to source data.
Earlier: Google’s AI Search Presents Challenging Choice: Share Data or Decline
In terms of data licensing, antitrust officials plan to propose two avenues: allowing Google to sell its underlying “click and query” data while also syndicating its search results separately. Currently, Google sells its syndication under specific constraints, limiting its usability on mobile platforms. Granting broader syndication rights could enable rival search engines and AI innovators to enhance their offerings rapidly, while a data feed may empower others to establish independent search indexes.
© 2024 Bloomberg LP
(This article has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
