Antitrust officials from the United States Department of Justice are preparing to request a judge to mandate Alphabet Inc.’s Google to divest its Chrome browser, marking a significant move against one of the largest technology firms globally.
The department intends to seek measures concerning Artificial Intelligence (AI) and Google’s Android operating system when it appears before a judge who previously ruled in August that Google held an illegal monopoly in the search market, according to sources familiar with the situation.
These officials, along with collaborating states, plan to propose on Wednesday that federal judge Amit Mehta impose data licensing requirements related to the case. Sources speaking on the condition of anonymity provided this information due to the sensitive nature of the matter.
If Judge Mehta agrees to these recommendations, it could substantially alter the dynamics of the online search market and the rapidly growing AI sector. This case was initiated during the Trump administration and has continued under President Biden, representing the most assertive attempt to regulate a tech company since the failed effort to dismantle Microsoft Corp. two decades ago.
The Chrome browser’s significance is paramount for Google’s advertising revenue, as it allows the company to monitor activities of signed-in users. This data is instrumental in honing targeted advertising, which constitutes the bulk of Google’s income. Additionally, Google has been leveraging Chrome to guide users to its leading AI product, Gemini, which could transform from a simple answer bot into a more interactive web assistant.
Lee-Anne Mulholland, Google’s vice president of regulatory affairs, criticized the Justice Department, claiming that it promotes a radical agenda that extends beyond the legal discussions at hand. She warned that government intervention in this manner would adversely impact consumers, developers, and American leadership in technology precisely when it is most crucial.
The Justice Department opted not to comment on the current proceedings.
In late trading, shares of Google saw a decline, dipping 1.8 percent to $172.16, despite a notable increase of 25 percent in their value this year prior to this event.
Chrome Access
Antitrust authorities are advocating for the judge to compel Google to divest Chrome, the world’s leading web browser, as it serves as a key entry point for many users accessing Google’s search engine. The government may assess whether such a sale is essential later, depending on whether new competitive conditions emerge from other proposed remedies.
Currently, Chrome holds a commanding 61 percent of the market share in the United States, according to StatCounter, a web traffic analysis service.
In recent months, government attorneys have engaged with numerous companies while formulating their recommendations, though additional ideas may still be on the table as states evaluate their options.
Officials in the antitrust division decided against a more drastic measure that would have involved forcing Google to sell its Android operating system.
Google’s Anticipated Legal Challenges
Appeal Plans
Judge Mehta’s ruling in August, which declared Google to be in violation of antitrust laws within both the online search and search advertisement markets, stemmed from a detailed trial last year spanning ten weeks. Google has indicated plans to appeal this verdict.
A two-week hearing is slated for April to address the necessary adjustments Google must undertake to rectify its unlawful practices, with a final ruling expected by August 2025.
The agency, along with the states involved, has agreed to recommend that Google be mandated to license results and data from its well-known search engine, while also affording websites more choices to prevent their content from being repurposed by Google’s AI tools.
Additionally, antitrust advocates are aiming for a requirement that Google separate its Android operating system from other products, such as its search services and the Google Play app store, which are currently offered as a package. They also plan to push for greater transparency, allowing advertisers more information and control over ad placements.
All of these recommendations were included in the initial filing made in October, which also sought to prohibit exclusive contracts central to the government’s case against Google.
If divestiture occurs, it will depend on identifying a suitable buyer. Potential buyers, such as Amazon.com Inc., are themselves under antitrust scrutiny, which could complicate any potential acquisitions. Bloomberg Intelligence analyst Mandeep Singh expressed skepticism over the likelihood of such a move but suggested that companies like OpenAI, the creator of the ChatGPT chatbot, might find the acquisition appealing for both distribution and advertising advantages.
AI Overviews
Google currently features “AI Overviews” at the top of its search results, utilizing AI-generated answers. While websites can choose to opt out of having their information used for AI model training, doing so could negatively impact their visibility in search results, leading to decreased traffic and advertising revenue.
Content publishers have raised concerns that these features diminish web traffic as users often do not click through to view the sources of the information presented in the overviews.
Data Licensing Framework
In terms of data licensing, antitrust officials are recommending two approaches: requiring Google to sell its underlying “click and query” data and separately syndicate its search results. Google currently sells its search results with specific limitations on their use, particularly in mobile contexts. By mandating broader syndication, rivals and AI startups could rapidly enhance their offerings, while the data feed would enable the development of independent search indexes.
© 2024 Bloomberg L.P.
(This report has not been edited by NDTV staff and is provided via a syndicated feed.)
