The U.S. Justice Department’s proposed solutions to breaking Google’s search dominance could weaken its main profit engine and stall its progress in artificial intelligence, although the end result could be years away. analysts said.

The DOJ said Tuesday it may ask a judge to force Google to divest parts of its business, such as its Chrome browser and Android operating system, that the Alphabet-owned company used to maintain an illegal monopoly in online research.

This is just one of several possible solutions being considered by prosecutors.

Ban Google from collecting sensitive user data, force it to make search results and indexes available to competitors, allow websites to opt out of having their content used to train AI products, and forcing Google to report to a “court-appointed technical committee” are also on the agenda. painting.

Alphabet investors, who have seen several antitrust actions this year, including a Monday ruling ordering Google to open its app store, sent their shares down 1.5% to $161.86 at Wednesday’s close, following the DOJ’s announcement.

The remedies strike at the heart of the Internet empire that has made Google synonymous with search and can reduce its revenue while giving rivals more room to grow.

“The DOJ has reverse engineered Google’s formula for success and intends to dismantle it,” said Gil Luria, managing director and senior software analyst at DA Davidson.

“The proposed privacy and data hoarding solutions would give Google the choice to share all the data it collects or stop collecting the data in the first place. Since it will likely choose the first solution, this could strengthen its competitors and possibly create new competition,” Luria said.

Analysts have warned that AI-related solutions could disrupt Google’s business as it is already under pressure from startups such as ChatGPT creator OpenAI and Google-based search engine operator AI, Perplexity.

Google’s U.S. search ad market share is expected to fall below 50% for the first time in more than a decade by 2025, according to research firm eMarketer.

“The last thing Google needs right now in the broader AI battle is to have to fight with one hand tied behind its back by regulators,” said Mark Shmulik, an analyst at Bernstein.

Other companies that could benefit from these solutions include search players such as DuckDuckGo and Microsoft Bing, as well as AI competitors such as Meta Platforms and Amazon.

“The framework understands that no single remedy can undo Google’s illegal monopoly; it will take a series of behavioral and structural remedies to free the market,” said Kamyl Bazbaz, senior vice president of public affairs at DuckDuckGo.

‘SPAGHETTI REMEDY’

But some industry observers and analysts said it was far from certain that the remedies, the largest U.S. antitrust effort since a case against Microsoft in 1999, would be implemented.

“The DOJ is throwing remedies at the wall,” said Adam Kovacevich, CEO and founder of Chamber of Progress, a trade group that represents technology companies.

“It might make headlines, but it’s a legal failure. The Department of Justice offers remedies that go well beyond the judge’s decision, and history shows us that general remedies will not survive the appeals process,” Kovacevich said.

However, Russ Mould, investment director at AJ Bell, said this risk had been known for a long time.

“Investors don’t seem to believe a forced breakup will happen,” he said.