The US Department of Justice (DOJ) has outlined potential remedies aimed at dismantling Google’s dominance in online search, a move analysts say could significantly impact the tech giant’s main profit engine and slow its advances in artificial intelligence (AI), reported Reuters. Though a final decision may take years, the proposed measures target key aspects of Google’s business, with far-reaching implications for its future.
As per the wire, the DOJ revealed on Tuesday that it may ask a judge to force Google to divest some of its business units, such as its Chrome browser and Android operating system, which it argues have helped maintain an illegal monopoly in online search.
In addition to divestitures, prosecutors are also considering barring Google from collecting sensitive user data and requiring the company to make its search results and indexes available to competitors. Other measures could include allowing websites to opt out of having their content used to train AI models and appointing a court-monitored technical committee to oversee Google’s operations.
Reportedly, these remedies could reduce Google’s revenue while offering its competitors, such as Microsoft Bing and DuckDuckGo, more room to grow. “The DOJ has reverse-engineered Google’s formula for success and is intent on dismantling it,” said Gil Luria, a senior software analyst at D.A. Davidson. He explained that one of the key proposals—sharing the data Google collects with rivals—could bolster competitors and even encourage the rise of new challengers.
Google is already feeling pressure in the AI space from emerging competitors like OpenAI and Perplexity. Analysts warn that the DOJ’s AI-related remedies, which may restrict Google’s access to valuable data for AI training, could harm its competitive position. “The last thing Google needs right now is to fight the AI battle with one hand tied behind its back,” remarked Bernstein analyst Mark Shmulik.
The proposed remedies represent the largest US antitrust action since the 1999 case against Microsoft. However, some industry experts are sceptical about the likelihood of such sweeping changes coming to pass. “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,” said Adam Kovacevich, CEO of the tech trade group Chamber of Progress.
Despite a drop in Alphabet’s share price following the announcement, investors appear unconvinced that a forced breakup of Google will materialise. Russ Mould, investment director at AJ Bell, commented, “This risk has been known for a long time. Investors don’t seem to believe a forced break-up will happen.”
(With inputs from Reuters)
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Published: 09 Oct 2024, 11:12 PM IST