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- The U.S. Department of Justice is pushing for Alphabet Inc. (NASDAQ: GOOGL) to spin off its Chrome business.
- Several open questions remain.
- Also: Discover the Next Nvidia.
Like the AT&T breakup of 1984 and the court case that tried to break up Microsoft in 2001, the federal government wants to dismantle Alphabet Inc. (NASDAQ: GOOGL) by spinning off the Chrome browser from Google. The case is that 1) the browser distributes Google’s myriad products, and 2) Chrome collects user data that helps Google target ads. According to the U.S. Department of Justice, Chrome also helps the company get users to adopt Google’s artificial intelligence (AI).
According to Bloomberg, “Antitrust enforcers want the judge to order Google to sell off Chrome — the most widely used browser worldwide — because it represents a key access point through which many people use its search engine, the people said.” Chrome has about two-thirds of the browser market in the United States.
Alphabet lost an antitrust case to the government four months ago. The Justice Department will argue that the court imposes the penalty for the spin-off of Chrome.
Several open questions remain. The first is whether Alphabet can win that case on appeal. It is impossible to handicap that change.
Second, the new Trump administration may weigh in on the decision. It is too early to say if that will happen, but the administration has indicated that government regulation will not be part of its relationship with American business. While Alphabet has lost the case, the Justice Department may throttle back on penalties if the mega tech company does not prevail in the courts.
Finally, as Microsoft did two decades ago, Alphabet may decide to negotiate a settlement with the Justice Department. Once again, it is impossible to tell how that will play out.
The image featured for this article is © bombuscreative / Getty Images
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