(This May 9 story has been refiled to fix the transposed words 'in' and 'Google' in the headline)

By Jody Godoy

(Reuters) - The U.S. Federal Trade Commission, the de-facto federal privacy regulator, said on Friday that the U.S. Department of Justice's proposal to make Alphabet's Google share search data with competitors includes adequate safeguards to protect users' privacy.

The proposal is part of a range of measures the DOJ says are necessary to open up the online search market, after ruling in August that the tech titan holds an illegal monopoly.

The Washington judge overseeing the case has seen a flood of input from experts and interest groups for and against the DOJ's proposals as the trial nears its end this month. The case could fundamentally reshape the internet by potentially unseating Google as the go-to portal for information online.

Increasing competition will put more pressure on Google to improve its privacy practices, the FTC said.

Google has sought to block the DOJ's data-sharing proposal, which its CEO Sundar Pichai said would give away the company's intellectual property, in part by arguing that it would harm user privacy.

The FTC said the proposal would appoint a committee to oversee compliance, similar to the agency's privacy-related settlements.

The DOJ and state attorneys general are also asking the judge to make Google sell off its Chrome browser and cease multi-billion dollar payments to Apple and other companies that set Google as the default search engine on new devices.

Google has said making its agreements non-exclusive, as it has already begun to do, is the right approach.

The DOJ and state attorneys general have expressed concerns that Google could extend its dominance to AI.

AI startup and Google partner Anthropic said in court papers on Friday that requiring Google to give the DOJ advance notice of its proposed AI investments and partnerships would create a "significant disincentive" for Google to invest in smaller AI companies and likely deter such investments altogether.

Google holds a minority stake worth billions of dollars in Anthropic.

Anthropic argued the proposal "would harm, not benefit, AI competition."