“The judicial system of the United States may divide one of the most technological companies in the world, which has monopolized the market of “search engines”. Only politics can prevent this.”, — write: epravda.com.ua
At the end of the 19th century, John Davison Rockefeller ran the largest trust in the United States, Standard Oil. His company in 1879 controlled 90% of American oil refining. The firm became a symbol of hard capitalism, using dumping, blackmail, espionage, bribery of officials and bribes to railway companies. At that time, the movement of progressives was gaining momentum, advocating business regulation, limiting monopolies, and protecting the rights of consumers and workers. Politicians also supported these ideas. However, Rockefeller, who controlled the US oil market, ignored attempts by Congress to limit monopolies. In 1909, the Supreme Court ruled that the company violated the Sherman Antitrust Act. Two years later, it was divided into 34 small enterprises. More than a century later, the country’s judicial system is faced with a similar case. The court found that Google, which handles 90% of US searches, violated antitrust laws. According to the judges, Google spent billions to create a monopoly by becoming the default search engine.Advertisement: The past few months have been a test for Alphabet, Google’s parent company. The prospect of a repeat of Standard Oil’s fate became too close. The Justice Department wants to force it to sell the Chrome browser, ban exclusive licensing agreements for search engines and limit Alphabet’s control over the AI industry.Advertisement: It looks like the Justice Department has found a “Davy Jones chest” at Google, its most valuable asset – the Chrome browser. For Alphabet, these measures could be a serious blow. Most of the company’s revenue comes from advertising, and without Chrome, Google’s advertising effectiveness could be significantly reduced. The court case was initiated during the first presidential term of Donald Trump, and may be completed during his second term. The finale of this story depends on whether Trump will destroy Google’s monopoly or become its savior. Why Chrome is important for Google Rumors about the creation of Google’s browser spread back in 2004, when the company involved former Microsoft developers. This event coincided with the rapid rise in popularity of Mozilla Firefox, which became the main competitor of Internet Explorer, a browser that had security problems. Google CEO Eric Schmidt didn’t want to create a browser for six years, believing that the company was too small for the “browser wars”. Everything changed when Google co-founders Sergey Brin and Larry Page presented Schmidt with a demo version of Chrome. “It was so good that it made me change my mind,” recalls the former Google CEO. Chrome development began in 2006 under the leadership of Sundar Pichai. In 2008, the browser was presented publicly. It was launched in the midst of the “second browser war” between Internet Explorer, Firefox, Safari and Opera. Thanks to its speed and minimalist design, Chrome quickly conquered the market. The “Second Browser War” stimulated the development of technology, contributing to the creation of faster, safer and more functional browsers. As a result, Chrome became the market leader, displacing Internet Explorer and Firefox. Infographic: The Economic Truth Google Chrome is now the most popular browser in the world with an audience of 3.5 billion users and a share of 65% of the global market. Google managed to achieve these results thanks to significant investments in the development of the browser, constant improvement of its operation and introduction of new functions. Since 2018, the number of regular users of Chrome has increased by 44.35%. Chrome plays a key role in Alphabet’s business model, generating significant revenue through several mechanisms. The browser is the “gateway” to other products – Gmail, Google Docs and Google Apps. Their integration encourages users to stay in the Google ecosystem, which increases audience engagement and loyalty. Read also: The world is in the pocket of corporations. How tech giants have become more influential than states Chrome is also a tool for displaying targeted advertising thanks to its extensive data collection capabilities. In 2023, Google’s revenue was $305.6 billion, of which $237.8 billion came from advertising, a significant portion of which was generated through Chrome. Before Chrome, Google had to pay other browsers to set the default Google search engine. Own browser allowed to minimize these costs, because Chrome contains the Google search engine. Chrome can be considered one of the key elements of the Google ecosystem, which helps the company maintain its leadership in the field of Internet search. This browser became an important tool in the formation of the monopoly status of the corporation. Infographic: Economic Truth Google’s influence is evidenced by one fact: in 2021, Mozilla, a Google competitor, received 83% of Google’s revenue. The company pays to have its search engine installed by default in the Firefox browser. Google has been a key sponsor of Mozilla for almost 20 years. In recent years, these payments exceeded 450 million dollars. per year, even with Firefox’s audience shrinking. From the point of view of business, such “charity” looks unusual, given the decline in popularity of Firefox. However, Mozilla’s support may be dictated by the desire to maintain competition in the market, creating the illusion that Google does not have a monopoly. What restrictions await Google After recognizing Google as a monopoly in the Internet search engine market, the US Department of Justice proposed a number of measures aimed at reducing the company’s dominance. According to government officials, Google’s monopoly harms economic growth. One of the main proposals of the Ministry of Justice is the requirement to sell the Chrome browser and not to enter the browser market with a new product for five years. The company may also be required to provide competitors with access to its search index, the database that is the “heart” of Google’s search engine. Google’s search index is a database of more than 100 million gigabytes that stores information about billions of pages. Thanks to the index, Google can quickly return relevant results. Access to the index will be almost free, allowing other companies to create their own search services. The Ministry of Justice also demands that smartphone and software manufacturers be prohibited from setting Google as the default search engine. Earlier, Judge Amit Mehta ruled that the $26.3 billion that Google paid other companies to install its search engine by default on smartphones and browsers blocked any competitors from succeeding in the market. Of this amount, 10 billion dollars. Google pays Apple. Read also: Apple of discord. How the world is fighting Apple’s monopoly and what it will give users The latest proposal of the Ministry of Justice is aimed at protecting the rights of content authors. There, they consider it necessary to give publishers and content creators the right to block the use of their data to train Google’s artificial intelligence. The government officials’ proposals are part of a lawsuit surrounding Google that will last until at least mid-2025. Google plans to appeal the decision to recognize it as a monopoly and is preparing a defense against the proposals of the Ministry of Justice. Is it possible to sell Chrome? It is difficult to predict what the decision of Themis will be. Proponents of increased state regulation of technology giants positively evaluate the government’s steps. Courtney Radsch, director of the Open Markets Institute’s Center for Journalism and Freedom, notes that the proposed measures could have a significant impact: “These initiatives are aimed at structural changes that eliminate Google’s advantages in product lines and destroy its monopoly position in the market.” Instead, Google warns of negative consequences. Google’s president of global affairs and chief legal officer Kent Walker said that such actions could harm consumers and If the court decides in favor of the government, Google will be forced to sell Chrome, according to Bloomberg, the cost of the browser will be at least 15-20 billion dollars. However, the browser is embedded in the Google ecosystem, which makes it difficult for other companies to monetize it. “Chrome is a gateway to other services. It is difficult to evaluate it only from the point of view of profit,” explains Bob O’Donnell of Technalysis Research. In addition, a potential deal could force Apple or Samsung to create their own search engines or strengthen the position of Bing as an alternative to Google. Why is Trump here After the next presidential election In the US, where Trump won, the world held its breath in anticipation of his inauguration and the first actions of the new administration.The technology world is also in a state of uncertainty.One of the main questions is the future of antitrust cases of the Ministry of Justice. However, it is not worth comparing 2016 with the current one. The unpredictable president may stop the investigation and allow the process to continue, saying it’s a “very dangerous move” that could strengthen China’s position.Although Vice President-elect JD Vance supports the idea of splitting up Google, Elon Musk was present during the conversations of the head of Google with the newly elected president of the United States Getty Images When the CEO of Google Sundar Pichai called Donald Trump to congratulate him on his victory in the elections, Elon Musk joined the conversation Meanwhile, Judge Mehta announced that the trial scheduled for April will not be delayed, even if the new administration reviews the approaches to the point Google is actively preparing for the next phase of the process. The company has asked its AI competitors – OpenAI, Perplexity and Microsoft – to provide financial information and user data. Presumably, Google will try to prove that the search engine’s policy does not limit competition and does not harm competitors’ businesses. Prosecutors plan to call witnesses, including representatives of OpenAI, Perplexity and Microsoft. The impact of artificial intelligence on the field of online search may become one of the main lines of discussion during the trial. This process can become a turning point in the interaction of regulatory bodies and technological giants. The results of the case will affect not only the US market, but also global competition, setting the tone for the regulation of AI and technology in the world.