Searching answers: Forced divestment of Chrome can shake up the market

The Department of Justice (DoJ), in the United States (US), recently suggested that Google be forced to divest the Chrome browser as part of a 35-page portfolio of suggested remedies to reduce its dominance in the online search and advertising space. This is in a federal antitrust case where the court has already found the search-engine giant guilty of monopolistic behaviour but is yet to announce remedial measures. Google has responded to the DoJ suggestions by characterising them “extreme”. The court may or may not adopt any of them. Moreover, the new Federal administration may instruct the DoJ to dial back its recommendations. Google would surely appeal any order that imposed a forced spinoff of the Chrome browser. If it occurs, it would significantly change digital markets. While it is easy enough for users to switch browsers, most users don’t. Hence Chrome holds market share, especially in the Android smartphone environment.

 

Although it is also easy to switch search engines, similar inertial behaviour patterns allow Google to remain, by far, the dominant one with over 90 per cent market share. The coupling of the dominant browser and search engine makes it easy to track surfing patterns, and Google has been repeatedly accused of monopolistic behaviour that favours its own services and products. If Chrome is indeed forcibly divested, Google’s dominance would be broken or, at least, decoupled and difficult to maintain. The new owner could tweak preferences and features to create a more level playing field. In turn, that may lead to more competition and innovation in search and advertising. Of course, it would be necessary to ensure that any new owner did not develop a similar stranglehold.

 

Google can make several arguments in favour of not forcing a spinoff. One is simply that it would not receive market value, whatever that may be, in an enforced sale of the browser. Another point is that the default settings of the browser and search engine can easily be changed. If, for example, the browser icon is not on the home screen, and there is no default search engine, users of new devices would have to set their own preferences. This technical fix would, however, leave the preferences of the vast base of current users undisturbed and that favours Google. A third argument, which is quite cogent, is that the monopoly has been already challenged by the rise of generative AI. ChatGPT and similar large language models (LLM) have changed search business and the ways in which results are presented.

 

An LLM prompt is very different from the entry of keywords in an old style search, and results are summarised very differently. Google is less dominant in this area and GenAI has thus led to a shakeup in digital marketing. Assuming Google retains ownership of its ad server Google Ad Manager (GAM), it will retain control of ad auctions for much of the internet. Apart from GAM and the Android operating system, Google would continue to have levers in the form of Gmail, GooglePay, YouTube, Google IoT hardware, etc to collect user-data. A more fragmented digital market would be a more competitive market and would surely drive innovation. Google launched its search engine in 1998 and rapidly achieved dominance in a nascent space. But almost three decades down the line, that space is ripe for change.