In August this year, internet giant Alphabet lost its biggest antitrust challenge yet when a US judge found that its subsidiary Google had illegally monopolized the search market. US Federal Court Judge Amit Mehta ruled that Google’s $26.3 billion (€24.9 billion) payments to other companies to make its internet search engine the default option on smartphones and web browsers effectively prevented other competitors from succeeding in the market. gave.

As a result of the August ruling, the US Department of Justice (DoJ) is proposing to force Google to sell its Chrome browser.

“Google’s illegal conduct has deprived its competitors not only of critical distribution channels but also of distribution partners that could enable competitors to enter these markets in new and innovative ways,” the Justice Department and government antitrust enforcers said in a filing Wednesday. he said.

Last month, the Justice Department filed court documents saying it was considering implementing “structural remedies” to prevent Google from using some of its products. In addition to selling Chrome, antitrust regulators are reportedly also demanding that Google take new measures regarding artificial intelligence (AI) and its Android smartphone operating system.

US antitrust officials and some US states also participated in the lawsuit, which was filed during the first Trump administration and continued under President Joe Biden. The proposal, billed as the “trial of the decade,” marks the government’s most significant effort to restrict the power of a tech company since the Justice Department’s failed attempt to break up Microsoft two decades ago.

In August, Google said it would appeal the decision because it would indicate “excessive government intervention” that would harm consumers.

Chrome is key to Google’s advertising business

Losing Chrome would be a heavy blow for Google. While almost 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 these searches.

Chrome acts 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 an important part of Google’s core business of selling internet advertising. Unlike searches performed in other browsers, Chrome allows Google to collect significantly more data, such as search behavior and preferred websites. This wealth of information helps Google target its ads more effectively.

‘If Chrome falls, Google will also falter’

Advertising is vital to Google and its parent company Alphabet. Alphabet generated over $230 billion in advertising revenue in 2023, accounting for the bulk of the year’s $307 billion in total revenue.

“If Chrome collapses, Google will also flounder significantly,” says Nils Seebach, co-CEO and CFO of digital consultancy Etribes. He told DW that in its current setup, Chrome is “an integral part of Google’s business model but probably won’t survive on its own.” Conversely, the sale of Chrome will also pose a significant challenge for Alphabet. “Such an event would be a major disruption even for the (digital) market.”

Ulrich Müller from the anti-monopoly non-profit organization Rebalance Now welcomes the proposal. He adds that selling Chrome would reduce Google’s ad revenue and limit its market dominance. This could push the company to compete more intensely based on the quality of its services, he told DW. Müller also sees the potential of alternative business models such as subscription-based search engines.

However, Seebach notes that it is unclear how long legal proceedings against Google will take and when the potential separation will actually occur. “By then, browsers or search engines as we know them today may already be obsolete,” he said.

Victory for US antitrust advocates

The decision against Google reflects more than a century of U.S. antitrust law. As early as 1911, these laws enabled the breakup of Standard Oil, John D. Rockefeller’s monopoly oil company.

Regulatory scrutiny of monopolies was very intense in the 1960s and early 1970s, says Ullrich Müller, but fell away in the 1980s when the neoliberal teachings of the Chicago School of Economics turned a blind eye to market concentration if monopoly companies were efficient. This led to less structural intervention in the following years.

But in the 1980s, a major antitrust lawsuit was successfully filed against telecommunications giant AT&T, which was dissolved in 1982.

Nearly 20 years later, Microsoft became a target of monopolistic regulators, and a US court ruled that the software giant should be broken up due to its monopolistic practices. The company’s Windows operating system was so tightly integrated with the Internet Explorer browser that it pushed rival Netscape out of the browser market. But Microsoft appealed the decision, avoiding a split after making parts of its system accessible to rivals.

This article was originally written in German.

Editor’s note: The article, originally published on November 20, has been updated to reflect the U.S. Department of Justice’s proposed sale of Chrome.