What would Google be worth without Chrome?

 Friday, November 22, 2024

Islamabad (News International/ Pakistan New News - 22nd Nov, 2024 ) In August this year, the world's largest internet company Alphabet lost its biggest antitrust challenge to date, when a US judge found that its subsidiary Google had illegally monopolized the search market. According to a report released during the trial against Google, the company was accused of paying $26.3 billion in 2021 to become the default search engine on mobile phones and web browsers.

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As a result of the August ruling, the US Department of Justice has recommended that the government force Google to sell its Chrome browser.

“Google’s unlawful conduct has deprived competitors not only of key distribution channels but also of distribution partners that could otherwise have enabled them to enter these markets in new and innovative ways,” the US Department of Justice and antitrust enforcement agencies said in a court filing on Wednesday.

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The US Department of Justice filed a court filing last month saying it was considering imposing “structural remedies” to prevent Google from using some of its products. In addition to selling Chrome, antitrust regulators are reportedly demanding new measures from Google related to artificial intelligence as well as its Android smartphone operating system.

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US antitrust officials and several US states have joined the lawsuit, which was originally filed under the first Trump administration and continued under President Joe Biden. In what has been called the “trial of the decade,” the proposal marks the most significant government effort to curb the power of a technology company since the U.S. Justice Department tried unsuccessfully to break up Microsoft two decades ago.

Google said in August that it would appeal the ruling, saying it amounted to “overreaching” government intervention that would harm consumers.

Chrome’s importance to Google

The loss of Chrome would be a major blow to Google. While about 90 percent of global searches are conducted through Google, more than 60 percent of users rely on the company’s own browser, Google Chrome, for such searches.

Chrome serves as Google’s gateway to the Internet. It allows the company to use services like Gmail for email and Gemini for artificial intelligence to promote its products and retain users.

But more importantly, Chrome is a key part of Google’s core business of selling Internet ads.

Unlike searches on other browsers, Chrome allows Google to collect significantly more data about search behavior and preferred websites. This wealth of information helps Google target its ads more effectively.

'If Chrome goes down, Google goes down'

Advertising is essential for Google and its parent company Alphabet.

In 2023, Alphabet generated more than $230 billion in advertising revenue, the largest share of its total revenue of $307 billion for the year.

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"If Chrome goes down, Google will go down significantly," believes Nils Seebach, co-CEO and CFO of digital consultancy Atribus.

He told DW that in its current setup, Chrome "is an integral part of Google's business model but probably cannot survive on its own." And conversely, the sale of Chrome would also present a significant challenge for Alphabet. Such an event would also be a major disruption to the (digital) market.

Al-Rikh Mueller of the antitrust non-profit organization Rebalance Now welcomes the decision, saying that the sale of Chrome would reduce Google's advertising revenue and curb its dominance in the market.

He told DW that it could force the company to compete more on the basis of the quality of its services. Mueller also sees the possibility of alternative business models, such as a subscription-based search engine.

Seebach, however, says that it is unclear how long the legal proceedings against him will last and when a possible break-up will occur. "By then, the browser or search engine as we know it may already be obsolete," he said.

The triumph of US antitrust laws

The Google ruling reflects more than a century of US antitrust law. Already in 1911, these laws had ensured the breakup of the monopoly of John D. Rockefeller's oil company, Standard Oil.

Al-Rich Mueller says that regulatory scrutiny of monopolies was intense in the 1960s and early 1970s, but faded in the 1980s when the neoliberal teachings of the Chicago School of Economics began to ignore market concentration, even though monopolies were effective.

This led to a decline in structural interventions in the following years.

However, in the 1980s, a major antitrust case was successfully brought against the telecommunications giant AT&T, which was broken up in 1982.

And nearly 20 years later, Microsoft became a target of antitrust regulators, with a US court ruling that the largest software company should be broken up for its monopolistic practices. The company's Windows operating system was so tightly integrated with its Internet Explorer browser that it pushed rival Netscape out of the browser market.