financetom
Business
financetom
/
Business
/
US plan to break up Google's search dominance threatens profit engine, AI growth
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
US plan to break up Google's search dominance threatens profit engine, AI growth
Oct 10, 2024 10:13 PM

(Reuters) - The U.S. Department of Justice's proposed remedies to break up Google's search dominance could weaken its main profit engine and stall its advances in artificial intelligence, even though a final outcome may be years away, analysts said.

The DOJ said on Tuesday it may ask a judge to force Google to divest parts of its business such as its Chrome browser and Android operating system, that the Alphabet-owned company used to maintain an illegal monopoly in online search.

It is only one of the many potential fixes prosecutors are considering.

Barring Google from collecting sensitive user data, requiring it to make search results and indexes available to rivals, letting websites opt out of their content being used to train AI products and making Google report to a "court-appointed technical committee" are also on the table.

The remedies strike at the heart of the internet empire that has made Google synonymous with search and can reduce its revenue while giving its rivals more room to grow.

"The DOJ has reverse engineered Google's formula for success and is intent in dismantling it," said Gil Luria, managing director and senior software analyst at D.A. Davidson.

"The proposed privacy and data accumulation remedies would give Google the choice to either share all the data it collects or stop gathering the data in the first place. As it will likely choose the former, that could strengthen its competitors and possibly create new competition," Luria said.

Analysts warned that the AI-related remedies could disrupt Google's business when it is already under pressure from startups such as ChatGPT maker OpenAI and AI-powered search engine operator Perplexity.

Google's U.S. search ad market share is forecast to fall below 50% for the first time in more than a decade by 2025, according to research firm eMarketer.

"The last thing Google needs right now in the broader AI battle is having to fight with one hand tied behind their backs by regulators," said Bernstein analyst Mark Shmulik.

Other companies likely to benefit from the remedies include search players such as DuckDuckGo and Microsoft Bing , as well as AI rivals such as Meta Platforms and Amazon .

"The framework understands that no single remedy can undo Google's illegal monopoly, it will require a range of behavioral and structural remedies to free the market," said Kamyl Bazbaz, senior vice president of public affairs at DuckDuckGo.

'REMEDY SPAGHETTI'

But some industry watchers and analysts said it was far from certain if the remedies, the biggest antitrust effort by the U.S. since a case against Microsoft in 1999, would go through.

"The DOJ is throwing remedy spaghetti at the wall," said Adam Kovacevich, CEO and founder of Chamber of Progress, a trade group that represents tech companies.

"It might score some headlines, but it's a legal non-starter. The DOJ is throwing out remedies that go far beyond the judge's ruling, and history tells us that broad remedies won't survive the appeals process," Kovacevich said.

Alphabet investors, who have seen several antitrust actions this year including a ruling on Monday ordering Google to open up its app store, showed little reaction to the DOJ's proposals.

Shares in the company were trading down just 0.9% on Wednesday.

"What's clear is that the market isn't worried. This risk has been known for a long time and investors don't appear to believe a forced break-up will happen," said Russ Mould, investment director at AJ Bell.

(Reporting by Zaheer Kachwala, Akash Sriram in Bengaluru; Writing by Aditya Soni; Editing by Arun Koyyur)

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Energys Receives $1.5 Million LED Lighting Contract in London
Energys Receives $1.5 Million LED Lighting Contract in London
Jun 3, 2025
11:16 AM EDT, 06/03/2025 (MT Newswires) -- Energys Group ( ENGS ) said Tuesday that it was awarded a second tranche of a project from Ark Multi-Academy Trust in London, UK, to upgrade existing infrastructure with the latest generation of LED lighting systems and intelligent controls. The current contract is worth 1.1 million British pounds ($1.5 million) and starts immediately,...
McKesson Finalizes Acquisition of 70% Stake in Core Ventures for $2.49 Billion
McKesson Finalizes Acquisition of 70% Stake in Core Ventures for $2.49 Billion
Jun 3, 2025
11:19 AM EDT, 06/03/2025 (MT Newswires) -- McKesson (MCK) said Tuesday it finalized the acquisition of a 70% controlling interest in Core Ventures for approximately $2.49 billion. The Florida Cancer Specialists & Research Institute, which established Core Ventures, retained a 30% interest in the business and administrative services firm. Shares were down 2.1% in recent trading. Price: 706.77, Change: -15.07,...
Bon Natural Life's Board Approves $1 Million Share Buyback Program
Bon Natural Life's Board Approves $1 Million Share Buyback Program
Jun 3, 2025
11:20 AM EDT, 06/03/2025 (MT Newswires) -- Bon Natural Life ( BON ) said Tuesday that its board approved a buyback program for up to $1 million of the company's class A common shares. The company said the timing and actual number of shares that will be repurchased will depend on certain factors, such as regulatory requirements and market conditions....
Google agrees $36 million fine for anti-competitive deals with Australia telcos
Google agrees $36 million fine for anti-competitive deals with Australia telcos
Aug 17, 2025
SYDNEY, Aug 18 (Reuters) - Google agreed on Monday to pay a A$55 million ($35.8 million) fine in Australia after the consumer watchdog found it had hurt competition by paying the country's two largest telcos to pre-install its search application on Android phones, excluding rival search engines. The fine extends a bumpy period for the Alphabet-owned internet giant in Australia,...
Copyright 2023-2026 - www.financetom.com All Rights Reserved