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Alphabet shares fell 4% on Thursday, after the Department of Justice called for Google to divest its Chrome browser as a remedy to its antitrust case.
The proposed breakup would, according to the DOJ filing Wednesday night, “permanently stop Google’s control of this critical search access point and allow rival search engines the ability to access the browser that for many users is a gateway to the internet.”
It’s the latest development in a yearslong, bipartisan antitrust battle against Google. In August, a federal judge ruled that the company held an illegal monopoly in both search and text advertising, violating Section 2 of the Sherman Act. The DOJ’s request represents the agency’s most aggressive attempt to break up a tech company since its antitrust case against Microsoft, which reached a settlement in 2001.
Chrome, which Google launched in 2008, provides the search giant with data it then uses for targeting ads. The DOJ said in the filing that forcing the company to get rid of Chrome would create a more equal playing field for search competitors.
“To remedy these harms, the [Initial Proposed Final Judgment] requires Google to divest Chrome, which will permanently stop Google’s control of this critical search access point and allow rival search engines the ability to access the browser that for many users is a gateway to the internet,” the 23-page filing reads.
Additionally, the DOJ said that Google should be prevented from entering into exclusionary agreements with third parties like Apple and Samsung. The department also said Google should be prohibited from giving its search service preference within its other products.
Remedies should prevent Google from eliminating “emerging competitive threats through acquisitions, minority investments, or partnerships,” the DOJ said, adding that they should run for 10 years.
“The proposed remedies are designed to end Google’s unlawful practices and open up the market for rivals and new entrants to emerge,” the filing said.
Search advertising accounted for $49.4 billion in revenue in Alphabet’s third quarter, representing 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 assist in restoring competition, “but Plaintiffs recognize that such divestiture may draw 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 of the Android ecosystem to favor its general search services,” and if they “ultimately fail to achieve the high standards for meaningful relief in these critical markets, the Court could require return to” the Android divestiture suggestion.
In a blog post on Thursday, Kent Walker, Google’s legal chief, called the DOJ’s proposal an “overbroad proposal” that would impact privacy and artificial intelligence investments at a critical time.
Walker added that it “goes miles beyond the Court’s decision” and “would break a range of Google products — even beyond Search.”
Google has said it will appeal the monopoly ruling, which would draw out any final remedy decisions.
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