The U.S. Department of Justice (DOJ) recently filed a significant motion in its ongoing antitrust case against Google, seeking remedies to address the company’s monopolistic practices. The DOJ is advocating for the breakup of Google, specifically calling for the divestiture of its Chrome browser and other assets to curb its dominance in the search and advertising markets. Here below are a few brief comments by CREATe team members on this trending topic.
Photo by Solen Feyissa on Unsplash
Konstantinos Stylianou, Professor of Competition Law and Regulation
If Judge Mehta accepts the Department of Justice’s main remedy request that Google divest Chrome, the court will have to decide who gets to buy Chrome. Valued at up to $20 bn, Chrome will be one of the largest divestitures ever ordered. The buyer will have to be approved by the court, and the decision will hinge on assurances that Chrome remains a viable and competitive player outside of Alphabet’s nest.
And here is where the complexities begin. Start with what Chrome is. Sure, you can see it as an internet browser, but if that’s all it is, then any buyer will do. There are dozens of browsers–most as good if not better than Chrome—and Chrome can easily find a new capable pair of hands to maintain it.
But Chrome is not just a browser; it’s a portal to users’ (Google-dominated) internet experience. It’s the direct link to a host of internet services, most pertinently to a default search engine, which is itself a gateway onwards to monetizable products and services. This means that the divestiture is not about preserving another browser in the market, but rather ensuring the continuing existence of a viable internet search option. After all, this is a case about search, right?
And here is where things get interesting. Whoever gets Chrome, gets the 60% of all internet users for whom Chrome is today their default browser. The buyer will then want to use Chrome as a gateway to their search engine (and then other services). But the only company that has both the deep pockets to afford Chrome and a search engine to go with it is Microsoft. Giving Chrome to Microsoft would be a perverse outcome given that the company has for over 15 years tried and failed repeatedly to convince users that its search offerings are good.
Other BigTech players, like Amazon and Apple, which have also developed search functionalities, can also bid for Chrome. However, considering the many antitrust battles each is fighting, they hardly provide assurances that giving Chrome to them will do much to make the search market more competitive.
Any other suitor that doesn’t already have search capabilities will likely be less good of a match. Since the case is about competition in the search market, if the company that buys Chrome does not have a good search alternative to Google there can be only three outcomes, all ineffective: the company either re-ties Chrome to Google search, or it ties it to another search engine which users will likely not prefer over Google search, or it simply gives users a free choice, in which case most users will likely choose Google search again.
This leaves only one potentially good type of candidate buyer for Chrome: a company with AI search aspirations and capabilities. Examples include ChatGPT, Perplexity, and Meta, and it’s rather likely that more AI companies will enter the search market by the time Judge Mehta needs to make a decision.
So, what’s the catch? There is no catch, but this is not a clean outcome either. Many AI companies are heavily backed by BigTechs, which means that their market conduct (and their choices around search) may be influenced by their BigTech funders, and that their success further entrenches the market dominance of their BigTech funders too. This may make the court loathe to give Chrome to an AI company backed by BigTech.
Moreover, most AI-enabled search offerings today run as complements to traditional search engines like Google Search or Bing. There are stand-alone AI search tools, such as SearchGPT, but it is not yet obvious that users regard those as substitutes for traditional search engines. If they don’t, then this, again, is not a suitable remedy for a search case.
In the end, whoever wins Judge Mehta’s heart (or, more usefully, brains), it is not at all certain the divestiture will go through. Not only may the court decide against such a drastic remedy, but Google is all but certain to appeal if it is ordered to divest Chrome.
Magali Eben, Senior Lecturer and CREATe Deputy Director
I welcome the filing by the Department of Justice – at a minimum, because it was time for a strong position from across the Atlantic. For at least a decade (if not longer), there has been critique of the EU approach (and the European Commission in particular) in its cases against Big Tech. Some of the critics alleged that going after US-based companies came very close to protectionism. Others felt that the remedies imposed on these companies in the EU – which mostly involved requiring that they cease the unlawful conduct or adopt diverging conduct – were a tiny plaster on a gaping wound. Many have suggested that structural remedies may be the best way to solve a systemic problem within these industries. The DoJ filing is the first step in answering: what happens when the US (the home of these Big Tech companies) takes a strong stance, requiring the divestiture of part of the company?
This divestiture and the other remedies proposed have a great deal to achieve. The DoJ notes in its filing that the remedy must ‘(1) unfetter [search and search text advertising] markets from Google’s exclusionary conduct, (2) pry them open to competition, (3) deny Google the fruits of its statutory violations, and (4) prevent Google from monopolizing these and related markets in the future.’ According to the DoJ, Google’s ownership and control of Chrome and Android makes it difficult to achieve this, making divestiture a must.
This is by no means the end of the story, however. The DoJ may not get what it is asking for (the filing does provide for behavioural remedies as an alternative, if divestiture is considered too drastic), and if it does, much is still uncertain.
Is there a potential buyer for it in the first place, other than another one of the Big Tech firms? Who is allowed to buy Chrome is likely to have an important impact on whether the remedy achieves its objectives. In particular, the DoJ seeks to enable the development of an ‘unfettered search ecosystem’ inducing entry, competition, and innovation. Which buyer would assure this objective is met?
And what does a sell-off of Chrome actually mean, for competition, consumers, and wider society?
The DoJ filing states that ‘[t] he playing field is not level because of Google’s conduct, and Google’s quality reflects the ill-gotten gains of an advantage illegally acquired.’ We can have sympathy for this stance, while also asking how much quality and consumer perception will matter in evaluating the effectiveness of the remedies: how much will consumers expectations (who may see Google’s products as the default) weigh on the reception of the remedy? Google is unlikely to go down easy – in Europe, it has argued that the only way it can comply with the requirements of the Digital Markets Act is to ‘remov[e] helpful features’ which benefit consumers and businesses. It has suggested it will have to go back to the ten blue links format of its earlier years… Whether this is malicious compliance or an inevitable outcome of any attempt to reduce Google’s power, it seems likely that it will leverage its consumers’ loyalty in this fight.
Gabriele Cifrodelli, CREATe PhD Researcher
The filing for proposed remedies in the relevant Google case by the US Department of Justice is very much welcome. This ‘proposed final judgement’ shows how in the American market-driven regulatory model (as defined by Anu Bradford), where the legislative power (Congress) and the executive one (Federal Government, especially considering the one taking office in January 2025) have no intention of tackling the important regulatory issues within (and beyond) the digital economy, the judiciary power (courts) can at least prevent those manifestly abusive practices that stifle the free and competitive market and consumers.
And this difficult balancing practice between the interests of the ‘Big Guys’ and the welfare of the public at large is more relevant than ever nowadays, encompassing a discussion and cooperation across different fields of law, including but not limited to competition, intellectual property, and international law. For instance, should we allow GenAI providers to train their models on copyrighted material, without recognizing the interests of the rightsholders or the users that, by generating such content, ‘feed’ those same AI models? Or, even by moving beyond the digital economy but by framing the scenarios along the same lines, should pharmaceutical companies strategically accumulate patents for protecting ‘anything under the sun’, despite the increasingly urgent need (especially after Covid-19) to promote and share knowledge transfer for the benefit of a humanity-oriented Global Health Security?
These are all questions that sooner than later would require taking a stand in one direction or the other. And if legislators around the world do not seem interested to address these issues in a definitive way for now (except through a few and still-to-be-seen effective efforts, e.g. in the EU), this task will be left to that judicial power which is perhaps the last democratic institution people still believe in.
Want to read more?
Brook, O. and Eben, M. (2023) Abuse without dominance and monopolization without monopoly. In: Akman, P., Brook, O. and Stylianou, K. (eds.) Research Handbook on Abuse of Dominance and Monopolization. Series: Research handbooks in competition law series. Edward Elgar.
Luca, S., Stylianou, K., Iramina,A., and Kretschmer, M. (2023). CREATe suggests improvements to upcoming DSA transparency database CREATe Blog
Stay tuned for more of our team’s publications and research updates by subscribing to our newsletter.