Google should be forced to sell Chrome browser, Justice Department says
Summary
A spinoff would be a major blow to Google following its loss in the antitrust trial.
The Justice Department on Wednesday said Google should have to sell off its popular Chrome browser as part of a court-ordered fix to its monopolization of the online search market.
The request follows the government’s victory this year in an antitrust case against Google and is likely to kick off a heightened legal fight with wide-reaching implications for the tech giant’s core business.
Government lawyers said competition can only be restored if Google separates its search engine from products it has built to access the internet, such as Chrome and its Android mobile operating system. Chrome controls about two-thirds of the global browser market, according to the website Statcounter. Searches in the Chrome address bar go through Google unless a user changes the settings.
The Justice Department also requested that Google be prevented from giving preferential access to its search engine on devices that use its Android mobile operating system. If Google violated that rule in the future, it would have to divest Android as well under the government’s proposal.
Android runs on billions of smartphones from manufacturers such as Samsung, along with Google’s own Pixel devices.
Google would also be forbidden from paying to be the default search engine on any browser, including Chrome under its new owner. Google currently pays Apple tens of billions of dollars a year to be the default on its Safari browser.
“The remedy must enable and encourage the development of an unfettered search ecosystem that induces entry, competition and innovation as rivals vie to win the business of consumers and advertisers," the department and over two dozen state plaintiffs wrote.
The government’s proposal also goes after Google’s role in the young artificial-intelligence market, which is starting to displace traditional search. The Justice Department wants the court to compel Google to allow website publishers to opt out of having their data used to train its AI models. Alternatively, the search giant could pay publishers to use their data.
In a statement this week, Google said a forced spinoff of Android or Chrome would “harm consumers, developers and American technological leadership." It accused the Justice Department of using the case to push a policymaking agenda.
About half of U.S. internet searches go through products where Google has paid to be the default, including Android phones, Apple devices and browsers such as Firefox, according to U.S. District Judge Amit Mehta’s opinion. Another 20% go through Chrome browsers that users have downloaded themselves and default to Google search.
Advertisements next to search results accounted for 57% of Google parent Alphabet’s $307 billion of revenue last year.
Mehta will oversee a trial starting in April to decide how to address Google’s antitrust violations. The judge has said he plans to decide by August. Google is expected to appeal his decision. That could delay the impact of a ruling for months or years.
A drastic proposal
Wednesday’s filing is the capstone of a legal effort by Biden administration antitrust enforcers to dilute the dominance of Google, Apple and Amazon. Google was the first of the defendants to get to a courtroom and the proposal to spin off Chrome shows how far the government will go to cut the tech giants down to size.
In an opinion 25 years ago, judges on the U.S. Court of Appeals for the District of Columbia Circuit vacated a lower court’s order to break up Microsoft. They suggest that remedy was only appropriate when a monopoly had been formed through mergers, as opposed to organically grown.
While the Justice Department will gain a new antitrust chief after President-elect Donald Trump takes office, Republicans have generally supported antitrust action against the company. The department filed the lawsuit in 2020 when Trump was president.
Google’s policy of pre-installing its search engine on Android devices and defaulting Chrome searches to itself have made it nearly impossible for rivals to gain the users and data required to improve their search engines and compete, Mehta ruled earlier this year.
Search engines typically improve based on the data they gather from searches conducted by users, in a cycle where success leads to higher quality which leads to even more success.
Spinning off Chrome and Android would be the most effective way to ensure other search engines get an opportunity to compete, said Fiona Scott Morton, a Yale University economist who served in the Justice Department during the Obama administration. As long as Google controls them, it will have a strong incentive to steer users toward its own search engine, she argued.
The Justice Department and the dozens of states that joined the lawsuit went back and forth on potential remedies in recent days. They initially planned to ask for a spinoff of Chrome only if Google failed to comply with limits on how it ties search to its other products.
But on Wednesday, the plaintiffs decided to seek a sale of Chrome independent of any other conditions, people familiar with the matter said.
Chrome’s importance to Google
Android and Chrome have been central to Google’s fortunes over the past two decades. Google CEO Sundar Pichai helped lead the development of Chrome in 2008 and later oversaw Android after its creator Andy Rubin stepped aside from his leadership role.
If Google sold Chrome, the new owner could select a company to be the default search engine, or users might have to choose an option.
As the world’s most popular search engine, Google would likely still get many queries through Chrome, Safari and other browsers if the Justice Department gets its way. But even a small loss could upend an industry in which competitors including Microsoft’s Bing and the independent DuckDuckGo have single-digit market shares.
DuckDuckGo said queries through its search engine on Chrome rose about 75% in Europe after Google introduced a “choice screen" in the browser in response to the European Union’s Digital Markets Act.
A divestiture of Chrome would also deprive Google of user data that help it deliver targeted advertisements. Google encourages users to sign in when using Chrome, which makes it easier for the company to track their online activity.
The Justice Department’s proposal asks for Google to have to share its search data with competitors.
Write to Dave Michaels at dave.michaels@wsj.com and Miles Kruppa at miles.kruppa@wsj.com
