By Ronan Shields, Seb Joseph and Marty Swant • November 20, 2024 •
Ivy Liu
U.S. lawmakers are reportedly urging an antitrust judge to make Google sell off its Chrome browser after the tech giant’s illegal search monopoly was exposed.
The Bloomberg report predictably has the ad industry buzzing, with some execs daring to hope it might come to pass. But temper those expectations — this isn’t exactly an anti-Google administration stepping into power.
President-elect Donald Trump underscored that point last month when he seemed to suggest breaking up Google isn’t in U.S. national interest. Sure, his stance could shift — predictability isn’t his forte — but for now, don’t bet on it.
Under this incoming administration, antitrust regulation is bound to take on a very different shape. Until Trump’s Attorney General takes charge, how antitrust efforts against Google will play out is anyone’s guess. Once appointed, the Attorney General — alongside a clear Justice Department hierarchy from the antitrust division to the White House — will set the tone for how companies like Google are regulated over the next four years.
Consider Judge Amit P. Mehta’s August ruling to understand what might unfold, which branded Google’s search business a monopoly. The judgment focused on Google’s substantial payments to secure default search placements on devices like iPhones and browsers like Mozilla’s Firefox. Judge Mehta found these deals to be anticompetitive because rivals can’t match Google’s payments due to its dominance and because Google’s exclusive data access bolsters its search capabilities, depending on its lead over competitors.
If the case is upheld on appeal, these deals will likely be prohibited. Such a remedy, while narrow, could chip away at Google’s market power, opening up space for innovation and creating a more level playing field. Another potential remedy might see Google required to share data with rivals — a nod to complaints from other search engines that Google makes it impossible for them to acquire the necessary query volume to build competitive alternatives. Mandating data sharing could offer a path to greater market fairness and competition.
Still, the prospect of a Google without Chrome remains a tantalizing, albeit impossible, dream.
Not great, but not necessarily a disaster
The divestiture of Google Chrome would be a significant blow to Google or, more pertinently, to its parent company, Alphabet, which has already professed its intention to contest any recommended remedy.
However, it’s also worth remembering that the entity has near-infinite resources — as of mid-November, its market capitalization hovered around the $2 trillion mark — and likely spent years formulating a defensive strategy.
According to some, it’s a strategy that can be utilized regardless of the volatility of electoral politics and the resulting personnel in key government roles. It rests primarily on “consumer privacy” requirements — one that has been utilized significantly by its Big Tech cohorts, such as Apple, and one they will continue using as a defensive moat.
After all, advocates of the competitive market will find user privacy a complex argument to counter, especially among officials who rely on the popular vote.
Other than the appeals process option, another defensive pillar for Alphabet centers on its ability to redesign its suite of monetization tools.
Predatory privacy?
And here’s where the developments in the search antitrust case dovetail with its other travails, i.e., the (soon to conclude) antitrust case scrutinizing its labyrinth-like ad tech suite. It’s a tactic that some in the industry term “predatory privacy.”
Some believe Google’s Privacy Sandbox efforts, which took full effect in the early 2020s, the same era its legal department became swamped with antitrust filings, have been used to deflect regulatory slings and arrows.
For example, publishers are concerned that Google’s Privacy Sandbox could diminish targeted advertising effectiveness in Chrome. In effect, the initiative may increase reliance on Google’s ecosystem, as it proposes moving ad auctions into the Chrome browser. This could benefit large platforms with more resources to adapt to a more complex ecosystem.
Additionally, the complexity of the 44 use cases under discussion raises questions about transparency and suitability. Some suggest that Chrome’s proposals might eliminate traditional roles of ad servers and supply-side platforms, further consolidating control within Google’s ecosystem.
One step ahead?
Others argue that the U.K.’s Competition Markets Authority — a regulatory entity that has arguably spent more time researching the intricacies of Google’s money-making empire — is better placed to argue for a fundamental breakup of the most powerful entity in digital given its oversight of Privacy Sandbox developments.
Some even believe the DOJ may even have to emulate their peers in Russia, an unlikely move, with a financial punishment, even if the number falls somewhat short of the fee — reportedly “more than the world’s entire GDP” — demanded by the Kremlin in a legal ruling last month.
Speaking at a panel session during last month’s Advertising Week New York, Justin Choi, CEO of Nativo, voiced the popular sentiment that Big Tech players have the finest engineers in the industry and hinted that Alphabet’s executive teams have already priced in any potential divestiture scenario.
“I think the DOJ is now fighting yesterday’s war. No matter what the result is, the damage is done, and by the time they have the remedy, the environment is going to be so different,” he said. “I think the only thing that would have a real serious impact would be, like, a $100 billion fine.”
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