Alphabet shares fall 4% amid DOJ pressure for Google to divest Chrome

Alphabet Shares fell 4% on Thursday, after the Justice Department asked Google to divest its Chrome browser as a remedy to its antitrust case.

The proposed split, according to the DOJ filing Wednesday evening, “would permanently end Google’s control over this critical search access point and allow competing search engines access to the browser that, for many users, is a gateway to the Internet”.

It’s the latest development in a years-long bipartisan antitrust battle against Google. In August, a federal judge ruled that the company had an illegal monopoly in search and text advertising, in violation of Section 2 of the Sherman Act. The DOJ’s request represents the agency’s most aggressive attempt to break up a technology company since its antitrust case against Microsoft, which resulted in a settlement in 2001.

Chrome, launched by Google in 2008, provides the search giant with data that it then uses to target ads. The DOJ said in the filing that forcing the company to dump Chrome would create a more level playing field for search industry competitors.

“To remedy these harms, the [Initial Proposed Final Judgment] “demands that Google divest Chrome, which will permanently end Google’s control over this critical search access point and allow competing search engines access to the browser that, for many users, is a gateway to the Internet,” can we read in the 23-page file.

Additionally, the DOJ said it should prevent Google from entering into exclusion agreements with third parties like Apple and Samsung. The ministry also said Google should be prohibited from giving preference to its search service in its other products.

The remedies should prevent Google from eliminating “emerging competitive threats through acquisitions, minority investments, or partnerships,” the DOJ said, adding that they should last 10 years.

“The proposed solutions aim to put an end to Google’s illegal practices and open the market to the emergence of competitors and new entrants,” the filing states.

Search advertising accounted for $49.4 billion in revenue in Alphabet’s third quarter, or three-quarters of total ad sales in the period.

In addition to its call for Google to sell Chrome, the DOJ said forcing the search company to divest its Android mobile operating system would also help restore competition, “but plaintiffs acknowledge that such a divestment could give rise to significant objections from Google or other market participants.

Instead, the DOJ suggested that the other remedies should be enough to “blunt Google’s ability to use its control over the Android ecosystem to further its general search services,” and if they “ultimately fail to achieving high standards for significant relief in these critical areas.” markets, the Court could require a return to the Android divestiture suggestion.

In a blog post published Thursday, Kent Walker, Google’s legal chief, called the DOJ’s proposal “an overly broad proposal” that would impact investments in privacy and artificial intelligence at a critical time.

Walker added that this “goes well beyond the Court’s ruling” and would “break a line of Google products, even beyond search.”

Google announced that it would appeal the monopoly decision, which would result in any final appeal decision being overturned.

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