The U.S. DOJ's proposed remedies to break up Google's search dominance could weaken its core business and impact AI advancements.
The U.S. Department of Justice's proposed measures to break up Google’s dominance in search could harm its main profit stream and slow down its progress in AI, even though a final decision may take years, according to analysts.
The DOJ may request that Google divest parts of its business, like Chrome and Android, which it claims are used to maintain an illegal monopoly in search.
Other possible actions include restricting Google's data collection, making search results available to competitors, allowing websites to opt out of training AI tools, and having Google report to a court-appointed technical committee.
Alphabet's stock dropped 1.5% after the DOJ’s announcement, as these remedies could cut into its revenue and open opportunities for rivals to grow.
"The DOJ has reverse-engineered Google's success and aims to dismantle it," said Gil Luria from D.A. Davidson. He added that privacy remedies could force Google to share data with competitors, potentially boosting competition.
Analysts warned that AI-related remedies could hit Google at a time when it faces pressure from startups like OpenAI and Perplexity. Google’s U.S. search ad market share is expected to drop below 50% by 2025, according to eMarketer. "The last thing Google needs is to be hampered by regulators in the broader AI battle," said Bernstein analyst Mark Shmulik.
Beneficiaries of the DOJ’s remedies could include search engines like DuckDuckGo and Microsoft Bing, as well as AI competitors like Meta and Amazon. Kamyl Bazbaz of DuckDuckGo noted that a mix of remedies is needed to effectively break Google's monopoly.
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