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The US Department of Justice (DOJ) is ramping up its efforts to challenge Google’s dominance in the search engine market, posing a potential threat to both the company's primary revenue stream and its advances in artificial intelligence (AI).
Analysts warn that the proposed antitrust remedies, while still years from being finalized, could drastically change the landscape for Google and open doors for its competitors.
At the core of these proposals are suggestions that Google, owned by Alphabet Inc., could be forced to divest key parts of its business, including the Chrome browser and Android operating system. These platforms have long supported Google’s grip on the online search market, but the DOJ now sees them as tools used to maintain what it argues is an illegal monopoly.
However, these potential divestitures are only part of a wider range of options under consideration. Prosecutors are also exploring additional steps aimed at weakening Google’s control over search and data collection.
These could include barring the company from collecting sensitive user information, requiring it to share search indexes and results with competitors, and allowing websites to opt out of having their content used to train AI models. A "court-appointed technical committee" could be introduced to oversee the company’s compliance with any new regulations.
The news has rattled Alphabet investors, causing the company’s stock price to drop 1.5% to $161.86 following the DOJ's latest moves. This comes on the back of a year already filled with antitrust actions against Google, including a ruling earlier this week that forces the company to open up its app store to greater competition.
The proposed remedies strike at the heart of Google’s business model, which is heavily reliant on the data it collects through its services to dominate the search advertising market. If forced to either share its data or stop collecting it, Google could find its competitive edge significantly blunted.
“The DOJ has reverse-engineered Google’s success formula and is intent on dismantling it,” said Gil Luria, managing director and senior software analyst at D.A. Davidson. “If Google is forced to share its data, this could strengthen its competitors and potentially introduce new players into the market.”
This is particularly concerning for Google as it faces growing competition in the AI space. Rivals such as OpenAI, the creator of ChatGPT, and AI-powered search engine Perplexity are already making inroads. These AI-related remedies could further disrupt Google's position, coming at a time when it is under pressure to stay ahead in the race for AI supremacy.
Mark Shmulik, an analyst at Bernstein, emphasized, “The last thing Google needs in the broader AI battle is to be tied down by regulators. This is happening at a critical time when Google is already projected to see its U.S. search ad market share dip below 50% by 2025.”
Competitors like DuckDuckGo and Microsoft Bing, along with AI-driven companies such as Meta Platforms and Amazon, are likely to benefit from the DOJ’s proposed remedies. Kamyl Bazbaz, senior vice president of public affairs at DuckDuckGo, noted, “It will take a combination of behavioral and structural remedies to truly open the market and diminish Google’s monopoly.”
While the DOJ's efforts are ambitious, some industry watchers are skeptical. Adam Kovacevich, CEO of Chamber of Progress, a tech industry trade group, called the proposed remedies "legal non-starters," adding that such broad solutions historically struggle to survive appeals.
Despite this, the potential risk to Google has been evident for some time, with analysts acknowledging that a forced breakup, though unlikely, remains a looming possibility.
