NEW YORK: The US said on Tuesday it may ask a judge to force Alphabet’s Google to divest parts of its business, such as its Chrome browser and Android operating system, that it says are used to maintain an illegal monopoly in online search.

In a landmark case, a judge found in August that Google, which processes 90 per cent of US internet searches, had built an illegal monopoly.

The Justice Department’s proposed remedies have the potential to reshape how Americans find information on the internet, while shrinking Google’s revenues and giving its competitors more room to grow.

“Fully remedying these harms requires not only ending Google’s control of distribution today, but also ensuring Google cannot control the distribution of tomorrow,” the Justice Department said.

Proposed remedies threaten search engine’s profits, AI growth; analysts call it a ‘legal non-starter’

The proposed fixes will also aim to keep Google’s past dominance from extending to the burgeoning business of artificial intelligence, prosecutors said.

The Justice Department is also considering asking for an order that would require Google to make available to rivals the indexes, data and models it uses for Google search and AI-assisted search features.

The court might also be asked to end Google’s payments to have its search engine pre-installed or set as the default on new devices.

Default search engine

Google has made annual payments — $26.3 billion in 2021 — to companies including Apple and other device manufacturers to ensure that its search engine remained the default on smartphones and browsers, keeping its market share strong.

Google called the proposals “radical” and said they “go far beyond the specific legal issues in this case”. Some of the ideas in the proposal had previously garnered support from Google’s smaller competitors such as reviews site Yelp and rival search engine DuckDuckGo.

Yelp, which sued Google over search in August, says spinning off Google’s Chrome browser and AI services should be on the table. Yelp also wants Google to be prohibited from giving preference to Google’s local business pages in search results.

The Justice Department is expected to file a more detailed proposal with the court by Nov 20. Google will have a chance to propose its own remedies by Dec 20.

US District Judge Amit Mehta’s ruling in Washington was a major win for antitrust enforcers who have brought an ambitious set of cases against Big Tech companies over the past four years.

Google has said it plans to appeal, and that its search engine has won users with its quality. It adds that it faces robust competition from Amazon and other sites where users go directly to search for goods or services, and that users can choose other search engines as their default.

Analysts say the proposed remedies to break up Google’s search dominance could weaken its main profit engine and stall its advances in artificial intelligence, even though a final outcome may be years away.

“The DOJ has reverse-engineered Google’s formula for success and is intent in dismantling it,” said Gil Luria, managing director and senior software analyst at D.A. Davidson.

“The proposed privacy and data accumulation remedies would give Google the choice to either share all the data it collects or stop gathering the data in the first place. As it will likely choose the former, that could strengthen its competitors and possibly create new competition,” Luria said.

Analysts warn that the AI-related remedies could disrupt Google’s business when it is already under pressure from ChatGPT maker OpenAI and AI-powered search engine operator Perplexity.

Google’s US search ad market share is forecast to fall below 50pc for the first time in over a decade by 2025, according to research firm eMarketer.

“The last thing Google needs right now in the broader AI battle is having to fight with one hand tied behind their backs by regulators,” said Bernstein analyst Mark Shmulik.

Other companies likely to benefit from the remedies include search players such as DuckDuckGo and Microsoft Bing, as well as AI rivals such as Meta Platforms and Amazon.

‘Remedy spaghetti’

But some industry watchers and analysts said it was far from certain if the remedies, the biggest antitrust effort by the US since a case against Microsoft in 1999, would go through.

“The DOJ is throwing remedy spaghetti at the wall,” said Adam Kovacevich, CEO and founder of Chamber of Progress, a trade group that represents tech companies. “It might score some headlines, but it’s a legal non-starter. The DOJ is throwing out remedies that go far beyond the judge’s ruling, and history tells us that broad remedies won’t survive the appeals process,” Kovacevich said.

Published in Dawn, October 10th, 2024