Google Does Not have to Divest Chrome, But Needs to Share Data

The decision not to divest Chrome or Android was a relief to investors, for whom these assets are central to Google’s market position.

A judge in Washington ruled on Tuesday that Google does not have to divest its Chrome browser. It appears to be a rare success for Big Tech, especially after facing persistent scrutiny from US antitrust authorities. However, the court has directed Google to share data with its competitors, thereby opening up competition within the online search sector.

After the ruling was passed, Alphabet’s shares increased by 7.2% in after-hours trading, reflecting investors’ approval of the decision that allows Google to continue making significant payments to Apple. It  is an arrangement that antitrust officials said froze out search rivals. Apple’s stock similarly experienced a 3% increase.

Judge Amit Mehta ruled that Google gets to keep its Android operating system, which, alongside Chrome, was the reason behind Google’s dominance in online advertising. This decision brings an end to a five-year legal dispute between Google and the US government, during which there were discussions about the influence and reach of major technology companies.

Last year, Mehta ruled that the company has an illegal monopoly in online search and advertising. However, the judge wrote the judgment of remedies with a sense of “humility”, noting that the competition  has now increased by AI companies since the case began. Mehta observed that the court was asked to predict future developments, a responsibility not typically within the judiciary’s role.

While the company must share data with competitors to welcome them into the advertising space, the decision not to divest Chrome or Android was a relief to investors, for whom these assets are central to Google’s market position. At the same time, Google is facing new competition from AI tools such as OpenAI’s ChatGPT, which are slowly taking away its longstanding dominance.

Now, AI firms can access the data after the company shares it, which they may use to develop their chatbot technologies, like their own search engines and browsers. Mehta remarked that AI companies are now better competitors to Google than any search engine has been in recent memory.

Deepak Mathivanan, an analyst at Cantor Fitzgerald, noted that although data sharing will create a competitive challenge for Google, it will not immediately affect consumers, as they will take some time to adjust to the new reality. In its response, Google raised concerns about user privacy if the data has been shared.

The company plans to appeal the decision, which could mean it may take several years before the company has to follow the ruling.

The ruling has also offered relief to Apple and web browser providers, with Mehta clarifying that they may continue to receive advertising revenue-sharing payments from Google for searches conducted via their platforms. Morgan Stanley analysts estimated that Google pays Apple approximately $20 billion each year.

Mehta further noted that stopping these payments is even less critical, given new AI tools like OpenAI’s ChatGPT are already threatening traditional internet search.

Beyond the search-related case, the company is involved in legal disputes about its dominance in various other markets. Recently, the company announced it would keep fighting after a ruling was passed to revamp its app store, after a lawsuit won by the creators of “Fortnite.” In addition, Google will appear in court later this month to discuss remedies in a separate case brought by the Justice Department, in which a judge found that the company holds illegal monopolies within the online advertising sector.

The two cases brought against the company by the Justice Department appear to be part of a broader bipartisan initiative by the US against Big Tech companies, which began during President Donald Trump’s initial term and includes legal actions against other major firms, such as Meta Platforms, Amazon, and Apple.