OPINION: Kneecapping Google would be bad for tech competition

We call them “Silicon Valley rivals,” but when you think about it, the big tech titans have mostly stayed in their respective lanes for the past 20 years. There is no Amazon social network or Google e-commerce store or Apple search engine. Sure, there have been attempts to muscle in on their rivals’ business from time to time - remember Amazon’s terrible smartphone? - but the companies have largely learned to stick to their respective strengths. Or, if you prefer, their individual monopolies.

This period of relative peace is rapidly changing. We’re entering a golden age of tech competition. But that’s not thanks to antitrust regulators - they are the ones who risk restraining progress.

The breakthrough moment of large language models and artificial intelligence tools such as ChatGPT has led the biggest Silicon Valley giants to try and encroach - or re-encroach - on each other’s turf. Microsoft fancies its chances against Google search. OpenAI is reportedly making a browser and a smartphone. Everyone has a chatbot. Amazon, Google, Nvidia and Microsoft are all making their own AI chips, and constructing huge data centers to house them in. The war for top developer talent has never been fiercer. I could go on for another few hundred words at least but the short of it is that the tectonic plates of tech are on the move.

Yet, there’s little acknowledgment of this reality at the Department of Justice, which last week homed in on its demands for remedying Google’s illegal monopoly on web search. Its court filing seemed to dismiss those outside sources of intense pressure and instead asserted that, barring drastic intervention of the DOJ’s design, Google would march straight into a market dominance of AI as it did with web search. “Fully remedying these harms requires not only ending Google’s control of distribution today,” DOJ’s antitrust head, Jonathan Kanter, said earlier this year, “but also ensuring Google cannot control the distribution of tomorrow.”

Therefore, it wants to force Google to sell its market-leading Chrome browser or its Android mobile operating system. Neither demand makes practical sense. It would lessen competition and deprive consumers of more sophisticated AI applications.

It’s also ripe for appeal. It’s proven near impossible to convince judges to make rulings based on the potential for dominance in an undeveloped market. The Federal Trade Commission, the other US body responsible for bringing antitrust cases, failed on two occasions. It lost its argument that Microsoft’s purchase of Activision Blizzard would allow it to unfairly dominate the future market for video games subscriptions. It also fell short in convincing a judge that VR fitness would one day be a large enough sector to warrant breaking off Meta’s deal to buy Within.

It’s easier to make a case that AI will form the “distribution of tomorrow,” as Kanter put it, since hundreds of billions of dollars are backing that being the case. But in doing so prosecutors are forced to acknowledge that, far from having an upper hand, Google is seen as something of an AI laggard, awash in a sea of highly-capitalized competitors. Its investors aren’t hoping Google can “control” the AI search market - they would settle for it merely keeping up.

I am sympathetic to the DOJ’s aims. From the outset, regulators had said it was not enough to merely fix the old problem - Google’s preferential search deals blocking out possible competition - since the company’s dominant position was far too entrenched for any retrospective change to make any real difference. Instead, regulators are attempting to look to the future and dole out a punishment that would hinder Google’s ability to use its search monopoly to capture an unfair advantage in the newer battlefield of AI.

There are some good ideas on the table. I’ve written before about the sensible suggestion that Google end its “devil’s bargain” requiring publishers to open themselves up to Google’s AI scrapers if they want to remain discoverable on Google’s search engine. In a separate case, there’s a chance to split up Google’s advertising monopoly - a move that has few downsides.

But given the historic magnitude of the DOJ’s victory - this is the first time a big tech firm has been branded an illegal monopoly since Microsoft in 2000 - I can understand why regulators would push for something more dramatic. Forcing a sale of Chrome would be a monumental scalp that would take pride of place on prosecutors’ résumés. Yet it would also be a highly counterproductive achievement if the goal is to do what’s best for consumers, which is to give them better choice over the tech tools they can use.

I consider it indisputable that the market for AI would grow more robust and more competitive if Google is present and firing on all cylinders. It is better for consumers, and innovation more broadly, if Google can harness all of its strengths - such as its unparalleled search engine, hugely popular email service, and staggeringly detailed Maps app - to build an AI that can compete with, and maybe beat, what’s being created by its rivals in Silicon Valley and further afield.

During a year in which I’ve grown increasingly bored by gimmicky applications of AI, Google’s capability to take its intimate knowledge of both our digital and in-real-life lives means it is well positioned to build an actual AI assistant capable of performing genuinely useful tasks - booking flights, train tickets, dinner reservations and hotel rooms, based on your personal schedule and with knowledge of your preferences and budget. It stands to reason that a company that has done more than any other to organize the world’s knowledge should, eventually, create powerful ways to draw upon it. The company should have every chance to succeed at that.

To do so, it must be allowed to keep Chrome and Android in-house. The products will be the primary vector through which Google’s AI will be accessed, whether on desktop or mobile, and the integration must be seamless in order to be fast, useful and secure. The consumer does not win if Google’s data ends up being farmed out to whatever third party buys Chrome - if any will. Up against Microsoft - which is building its “Copilot” AI directly into Windows by default - and Apple, which is attempting similar with MacOS and iOS, Google is going to be left in the dust.

If you want to see Google punished severely for its monopolistic misdeeds, then you may view that as a fine and fair outcome. But if you want to see the best AI tools possible made available to the maximum number of people, then this government intervention would be going too far.

Dave Lee is Bloomberg Opinion’s US technology columnist. He was previously a correspondent for the Financial Times and BBC News. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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