• October 14, 2024
  • roman
  • 0



In a significant escalation of its antitrust battle with Google, the US Department of Justice (DOJ) has proposed splitting off Google’s Chrome browser and Android operating system as part of sweeping remedies aimed at curbing the tech giant’s “illegal monopoly” in online search and advertising.

“The DOJ is considering behavioral and structural remedies that would prevent Google from using products such as Chrome, Play, and Android to advantage Google search and Google search-related products and features — including emerging search access points and features, such as artificial intelligence — over rivals or new entrants,” the DOJ said in a court filing.

The department said that Google’s longstanding control of the Chrome browser, with its preinstalled Google search default, “significantly narrows the available channels of distribution and thus disincentivizes the emergence of new competition.”

It also said that it is “considering remedies that would limit or end Google’s use of contracts, monopoly profits, and other tools to control or influence longstanding and emerging distribution channels and search-related products.”

“For example,” the DOJ said, it is “evaluating remedies that would, among other things, limit or prohibit default agreements, preinstallation agreements, and other revenue-sharing arrangements related to search and search-related products, potentially with or without the use of a choice screen.”

The proposal comes after an August 2024 ruling by Judge Amit Mehta that found Google guilty of maintaining monopolies in the US general search services and general search advertising markets, violating the Sherman Act.

“Splitting Chrome and Android from Google could reduce Google’s dominance in search, a space where Google faces challenges from conversational search capabilities in Perplexity, Bing, and ChatGPT, as well as from TikTok, which recently enhanced its search to allow brands to target specific keywords in search results,” said Xiaofeng Wang, principal analyst at Forrester.

Its presence and market share on mobile would decrease if its search engine were not pre-installed or set as the default on new mobile devices. This could potentially lead to a reallocation of search ad budgets from Google to other platforms, Wang pointed out.

“Android is the foundation of Google’s scale for its advertising and services with more than 3 billion users on the planet generating trillions of search queries in a year,” said Neil Shah VP for research and partner at Counterpoint Research. “This is what drives Google’s core business model of advertising through search and display creating significant access and stickiness for marketers to pay top dollars for their campaigns.”

Shah pointed out that “decoupling search, android and properties such as Chrome and foundational tech such as AI and cloud from the tightly coupled & well-integrated offering would remove the stickiness and effectiveness of Google’s model and earnings significantly.”

This move, if implemented, would mark one of the most aggressive actions against a tech company in decades and could fundamentally reshape the digital landscape. The DOJ’s proposal highlights the extent to which Google’s control over Android and Chrome has bolstered its search dominance, enabling it to suppress competition and entrench its monopoly.

Reining in Google’s power

Google’s Chrome browser, the most widely used web browser globally, and Android, which powers over 70% of the world’s smartphones, have been critical to Google’s dominance in search. By controlling these platforms, Google has ensured that its search engine is the default option for millions of users, effectively locking out competition.

The DOJ’s proposed remedy would split these products from Google’s core search and advertising businesses, significantly weakening the company’s ability to funnel users into its search ecosystem.

“The DoJ’s proposal to potentially separate Chrome and Android from Google marks a significant turning point in the digital landscape,” said Prabhu Ram, VP for Industry Research Group at CyberMedia Research. “While the timeline for such a separation remains uncertain, the move could reshape competition in search, mobile, and advertising markets.”

The DOJ’s proposed remedies go beyond splitting Chrome and Android. The department is also targeting Google’s revenue-sharing agreements with device makers and telecom companies, which have kept Google as the default search engine on the vast majority of devices globally. This practice has effectively blocked competitors from gaining market share.

In addition, the DOJ aims to tackle Google’s control over user data. The tech giant’s ability to collect and leverage vast amounts of data has been a key competitive advantage, enabling it to optimize search results and advertising better than any of its rivals. The DOJ is seeking to implement data-sharing requirements that would give competing search engines access to similar data, leveling the playing field, the DOJ statement said.

The proposal to break up Google’s operations is the most aggressive remedy suggested by the DOJ since it began its antitrust investigation into the company. It reflects a growing trend in regulatory efforts worldwide, with lawmakers increasingly looking to rein in the power of Big Tech.

Splitting Chrome and Android from Google would have far-reaching implications, not just for Google but for the entire technology industry. The move would likely spur innovation by allowing smaller search engine and advertising companies to compete on a more level playing field.

“I think it’s happening at a time when the entire technology landscape is changing in such a way that this decoupling becomes irrelevant,” said Faisal Kawoosa, founder and chief analyst at Techarc. “With AI increasingly becoming the default interface between humans and devices/gadgets, the lines between OS and browser is blurring organically.”

“So, I don’t think this move is going to make a great impact in the present scenario,” Kawoosa stated.

Google hits back at the proposal

In response to the DOJ’s proposed remedies, Google has expressed strong concerns over the implications of splitting its Chrome browser and Android operating system from its core business.

“We’ve invested billions of dollars in Chrome and Android. Breaking them would change their business models, raise the cost of devices, and undermine competition with Apple,” Google said in a blog post. “Chrome is a secure, fast, and free browser and its open-source code provides the backbone for numerous competing browsers. Android is a secure, innovative, and free open-source operating system that has enabled vast choice in the smartphone market, helping to keep the cost of phones low for billions of people.”

Google argued that features like Chrome’s Safe Browsing and Android’s security protections benefit from integration with its broader ecosystem and separating them could jeopardize user security.

Google also emphasized that the proposed remedies could result in significant unintended consequences for consumers and the overall competitiveness of American technology. “Forcing Google to share your search queries, clicks, and results with competitors risks your privacy and security,” the statement cautioned, highlighting that sensitive data could fall into the hands of companies lacking robust security practices.

“As Google rightly contested it makes money by giving away its offerings effectively free but makes money on the access and ability for publishers and marketers to target that individual leveraging users’ data with their campaigns,” Shah said. “If it’s broken up and not integrated, Google will have to switch business models which will reduce its scale, the opportunity to effectively target its users, and potentially will have to develop ways to license all stakeholders a fee for access and the tech usage, which will increase the prices of devices, software and services as it will be no longer viable or well-oiled to be given free.”

Google alleged the DOJ’s outline of potential changes as a sweeping agenda extended far beyond the legal issues at hand. “This is the start of a long process, and we will respond in detail to the DOJ’s ultimate proposals as we make our case in court next year,” the statement read.

The tech giant also expressed concerns that hampering its AI capabilities could stifle innovation in a crucial sector for America’s technological leadership. “There are enormous risks to the government putting its thumb on the scale of this vital industry — skewing investment, distorting incentives, and hobbling emerging business models,” the company stated.

On the advertisement business model, Google stated that government-mandated changes could make ads less valuable for publishers and merchants, ultimately harming consumers.

“We believe that today’s blueprint goes well beyond the legal scope of the Court’s decision about Search distribution contracts,” the blog post added, asserting its commitment to defending its practices in court.

A new era of antitrust?

The DOJ has laid out a timeline for its proposed remedies, with a further refined version of the Proposed Final Judgment expected by November 2024, and a revised proposal due in March 2025. Google is expected to challenge the remedies in court, setting the stage for a legal battle that could shape the future of antitrust enforcement in the digital age.

Analysts and industry watchers believe this case may set a precedent for antitrust litigation against tech giants across markets.

“This is not just about Google; it’s about how we regulate the tech industry moving forward,” said an antitrust expert in a rival company who did not want to be identified. “If the DOJ succeeds, it will send a strong message to other tech giants that their dominance won’t go unchecked.”

This move could set a precedent for more aggressive antitrust actions against other tech giants, Wang said. “The US has also sued Meta Platforms, Amazon, and Apple, claiming they illegally maintain monopolies. Therefore, if the Google case goes through, it would affect more tech giants.”

“Of course, there is this issue with big tech where most of them are seen caught in one or the other anti-trust situation,” Kawoosa added. “So, we might see more litigations.”



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *