In August, internet behemoth Alphabet lost the biggest antitrust challenge it has ever faced when a US judge found that its subsidiary Google illegally monopolized the search market.
US Federal Court Judge Amit Mehta ruled that $26.3 billion (€24.9 billion) in payments that Google made to other companies to make its internet search engine the default option on smartphones and web browsers effectively blocked any other competitor from succeeding in the market.
As a result of the ruling, the US Department of Justice (DoJ) is proposing that Google be forced to sell off its Chrome browser.
"Google's unlawful behavior has deprived rivals not only of critical distribution channels but also distribution partners who could otherwise enable entry into these markets by competitors in new and innovative ways," the DoJ and state antitrust enforcers said in a court filing on Wednesday.
Last month, DoJ already filed court papers saying it was considering enforcing "structural remedies" to prevent Google from using some of its products. Apart from selling off Chrome, antitrust regulators are reportedly also demanding new measures to be taken by Google related to artificial intelligence as well as its Android smartphone operating system.
A breakup of Google would be a severe blow to CEO Sundar Pichai. (Image: IMAGO/Kyodo News via Deustche Welle)
US antitrust officials and a number of US states have joined the case that was originally filed under the first Trump administration and continued under President Joe Biden. Touted as the "trial of the decade," the proposal marks the most significant government effort to curb the power of a technology company since the DoJ unsuccessfully attempted to break up Microsoft two decades ago.
In August, Google said it would appeal the ruling as it would mark an "overreach" by the government that would harm consumers.
Chrome is key to Google's ad business
Losing Chrome would be a severe blow for Google. While nearly 90% of global search queries are conducted through Google, more than 60% of users rely on the company's own browser, Google Chrome, to perform those searches.
Chrome serves as Google's gateway to the internet. It allows the company to promote its own products and retain customers, including services like Gmail for email and Gemini for artificial intelligence.
But more importantly, Chrome is a crucial part of Google's core business of selling internet advertising. Unlike searches performed on other browsers, Chrome allows Google to collect significantly more data, such as search behaviors and preferred websites. This wealth of information helps Google target its ads more efficiently.
'If Chrome falls, Google falters'
Advertising is essential to Google and its parent company, Alphabet. In 2023, Alphabet generated over $230 billion ($219.4 billion) in ad revenue, which accounted for the majority of its $307 billion in total revenue for the year.
Nils Seebach, co-CEO and CFO of digital consultancy Etribes, told DW that "if Chrome falls, Google falters significantly." He said that in its current setup, Chrome is "integral to Google's business model but likely couldn't survive on its own." And vice versa, the selloff of Chrome would present a significant challenge for Alphabet as well. "Such an event would be a major disruption, even for the [digital] market."
Ulrich Müller from the anti-monopoly nonprofit Rebalance Now welcomed the proposal. He said that a sell-off of Chrome would reduce Google's ad income and curb its market dominance. This could push the company to compete more heavily based on the quality of its services, he told DW. Müller also sees potential for alternative business models, such as subscription-based search engines.
Seebach noted, however, that it's unclear how long legal proceedings against Google will continue and when the potential breakup will actually happen. "By then, browsers or search engines as we know them today might already be obsolete," he said.
Victory for US antitrust advocates
The ruling against Google reflects over a century of US antitrust law. Way back in 1911, those laws ensured the breakup of Standard Oil, John D. Rockefeller's monopoly oil company.
Müller said regulatory scrutiny of monopolies was very intense in the 1960s and early 1970s, but fell off in the 1980s when the neoliberal teachings of the Chicago School of Economics condoned market concentration if monopoly companies were efficient. This led to fewer structural interventions in the following years.
In the 1980s, one big antitrust case was, however, successfully launched against telecommunications giant AT&T, which was broken up in 1982.
Some 20 years later, Microsoft became the target of monopoly regulators, with a US court ruling the software giant must be split up due to its monopolistic practices. The company's Windows operating system was so tightly integrated with its Internet Explorer browser that it pushed competitor Netscape out of the browser market.
Microsoft appealed the ruling, however, avoiding a breakup after making parts of its system accessible to competitors.
