Analysts say the U.S. Justice Department's proposed bailout to break away from Google's search dominance could weaken Google's main source of revenue, even though final results may be years away. , said it could stall progress in artificial intelligence.
The Justice Department on Tuesday asked a judge to force Google to sell parts of its business, including the Chrome browser and Android operating system, saying the Alphabet Inc.'s company maintained an illegal monopoly on online search. It was announced that there is a possibility.
This is just one of many amendments prosecutors are considering.
Banning Google from collecting sensitive user data, making search results and indexes available to rivals, allowing websites to opt out of content used to train AI products, and forcing Google to “court'' It also includes a requirement to report to a “technical committee appointed by the government.” table.
Alphabet investors, who have seen several antitrust violations this year, including Monday's ruling ordering Google to open an app store, had their stock down 1.5% as of Wednesday's close on the Justice Department news. The price has increased to $161.86.
The bailout would strike at the heart of the internet empire that has made Google synonymous with search, potentially reducing revenue while giving competitors room to grow.
“The Department of Justice has reverse-engineered Google's formula for success and is intent on dismantling it,” said Gil Luria, managing director and senior software analyst at DA Davidson.
“The proposed privacy and data storage remedies would give Google a choice between sharing all the data it collects or stopping data collection in the first place. It would likely choose the former. “But that could strengthen competitors and create new competition,” Luria said.
Analysts say an AI-related bailout could disrupt Google's business, as the company is already under pressure from startups such as ChatGPT maker OpenAI and AI-powered search engine operator Perplexity. I was warned that there would be.
Google's U.S. search advertising market share is expected to fall below 50% for the first time in more than a decade by 2025, according to research firm eMarketer.
“The last thing Google wants right now in the broader AI battle is to have to fight with regulators tied behind its back,” Bernstein analyst Mark Schmulik said.
Other companies that could benefit from the relief package include search players such as DuckDuckGo and Microsoft Bing, and AI rivals such as Meta Platforms and Amazon.
“This framework recognizes that no single remedy can undo Google's illegal monopoly,” said Kamil Bazbaz, senior vice president of communications at DuckDuckGo. will require a range of behavioral and structural remedies.”
“Remedy Spaghetti”
But some industry watchers and analysts said it was entirely uncertain whether the relief, the largest antitrust action by the United States since the 1999 lawsuit against Microsoft Corp., would ever materialize.
“The Justice Department is throwing spaghetti relief packages at the wall,” said Adam Kovacevic, CEO and founder of the Chamber of Progress, a trade group representing technology companies.
“It may make some headlines, but legally it's not a starter. The Justice Department has come up with remedies that go far beyond the judge's ruling, and broad remedies don't survive the appellate process. History tells us that,” Kovacevic said.
But Russ Mold, investment director at AJ Bell, said this risk had been known for some time.
“Investors don't seem to think there will be a forced breakup,” he said.
